BUENOS AIRES (Reuters) – Argentina’s newest Economy Minister Sergio Massa officially took the reins of his newly named “super ministry” on Wednesday, with expectations he will announce spending cuts to calm markets amid a deepening economic crisis.
The South American country’s large budget deficit, exacerbated by years of overspending, raging inflation, high levels of debt and an ailing peso currency, all awaited Massa, Argentina’s third economic chief, last month.
Massa, a former Congress leader and lawyer for the ruling Peronist coalition, was sworn in by President Alberto Fernandez in Buenos Aires. He was due to deliver a speech later on Wednesday announcing fresh spending cuts and measures to bolster dwindling foreign exchange reserves.
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Some local markets appeared emboldened ahead of expected announcements on Wednesday. Argentina’s main stock index, the S&P Merval, closed down 1.43% just before Massa took the oath of office.
However, government bonds fell 0.4%, while the informal black market peso weakened 2.35% to trade at 298 pesos to the US dollar.
The warring factions of the centre-left ruling coalition have rallied behind Massa in what many see as perhaps Fernandez’s last chance to stem the economic bleeding that has tarnished the government’s popularity ahead of next year’s presidential election.
“The economy is in a difficult situation with a very complicated global context,” Juan Manzur, Fernandez’s chief of staff, told reporters. “But despite all our problems, we have faith in him.”
Massa is to lead a well-developed Ministry of Economic Affairs, in which he will report to the secretariats for agriculture, production and trade.
His rise to the top post in economic policy follows the abrupt resignation of former Economy Minister Martin Guzman in early July. Guzman’s successor, Silvina Batakis, was in office just a few weeks after him.
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Reporting by Nicolas Misculin; Edited by Deepa Babington and Alistair Bell
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