Argentine president announces salary hikes, tax cuts after poll setback
BUENOS AIRES: Argentine President Mauricio Macri announced plans for salary hikes and tax cuts on Wednesday after voters turned resoundingly against his austerity policies, sparking days of economic turmoil.
Macri, who seeks re-election in October, said he will cut income taxes for workers, increase subsidies and introduce a 90-day freeze on fuel prices to help ease the economic shock.
He also announced an unspecified increase in the monthly minimum wage — currently 12,500 pesos, or $208 — saying it would benefit two million workers.
“My task is to ensure governance. Dialogue is the only way. Uncertainty has caused a lot of damage and forces us to be responsible. I want to convey peace of mind in this electoral process that has begun,” he said in a message released before markets opened.
He said the measures would “benefit 17 million workers and their families and all small and medium-sized businesses, formal and informal, state and private.”
The president said the package of measures would “relieve the pockets” of Argentines hit by 55 per cent inflation and a 20 per cent devaluation in the value of the peso this week as markets reacted to Macri’s defeat.
The president’s announcement did little to immediately ease market concerns, however.
Half an hour after his announcement, the Argentine peso was trading at 60.77 to the dollar, down a further four per cent from Tuesday’s close.
The market friendly Macri was dealt a huge blow in his bid for re-election when he polled 15 points less than centre-left Peronist candidate Alberto Fernandez in Sunday’s primary elections, which served as a bellwether for general elections in October.
Macri said he wanted to relieve a situation affecting a weary electorate.