Argentine President Mauricio Macri on Wednesday unveiled a package of welfare su...
BUENOS AIRES - Argentine President Mauricio Macri on Wednesday unveiled a package of welfare subsidies and tax cuts for lower-income workers to lessen the pain of an economic crisis months before elections, but his announcement failed to halt the peso currency’s collapse.
The peso closed 7.1% weaker on Wednesday to reach 60.2 per U.S. dollar, having lost a quarter of its value so far this week in a market meltdown unseen in Argentina since the country’s 2001 debt default.Macri promised on Wednesday he would raise the minimum wage, temporarily freeze gasoline prices and increase the income tax bracket floor by 20%.
Macri, a member of one of Argentina’s wealthiest families, had promised voters to kick-start the commodities-rich economy via a liberalization wave but four years later inflation is at 55% and the country is in recession.Brenda Scala, 25, said the 2,000-peso estimated savings through Macri’s new cuts would barely cover the cost of an electricity bill.
“Because of the seriousness of the situation, the risk is that we end up without reserves and that the Fund ends up turning its back on us,” the presidential candidate told El Destape Radio. The market meltdown is likely to deal a heavy blow to Argentina’s faltering economy. Sales of goods from cars to food and beauty products have slowed in recent days, as suppliers hold back shipments while trying to calculate how the weaker peso will affect consumer prices.
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