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Macri's measures to weather the storm: 'too little, too late'

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Macri's measures to weather the storm: 'too little, too late'

Argentina's President Mauricio Macri on Aug. 14 announced measures to soothe severe economic volatility seen this week, following the resounding victory of Peronist opposition candidate Alberto Fernández in primary elections on Sunday.

The package includes tax cuts for 17 million workers and families, along with higher subsidies for the poor and a one-off bonus payment for state workers. The government will also freeze fuel prices for the next three months and plans to raise the minimum salary.

The measures also include the raising of the income tax floor by 20%, which will benefit an estimated two million workers, as well as a 10-year installment plan for small and medium-sized enterprises to meet their tax obligations.

Analysts and economists interviewed by the business daily El Cronista described the measures as 'too little, too late' and considered them to be politically motivated to attract votes in the October elections, but they said the measures would not have a significant economic effect.

"These measures are too late. Furthermore, I see little effectiveness from them in the context of financial instability and a soaring dollar that will accelerate inflation in the coming months and liquefy purchasing power," Federico Furiase, director Eco Go consulting told the paper.

Pablo Castagna, analyst at Balanz, said the measures would be positive as a way to "stimulate a burdened middle class, to stimulate SMEs, but they are being taken a little too late, a little out of context."

In a televised speech, Macri apologized to the nation for his words in an Aug. 12 press conference, when the president seemed to blame voters for the volatility that ensued the wider-than-expected defeat by his party in the PASO primaries. "I deeply respect the Argentines who voted for other alternatives; those who voted for us in 2015 and now voted against us," Macri said.

Alberto Fernández, the main opposition to incumbent Mauricio Macri in Argentina's October presidential election, held a 15.5-point advantage in the Aug. 11 primary vote, far stronger than what polling had suggested. The results have seen the Argentine currency lose around a third of its value, while stocks and bonds have plummeted, amid the political uncertainty and the likelihood of Argentina returning to Peronist rule.