By Nicolas Misculin
BUENOS AIRES, August 3 (Reuters) – Argentina’s newest economy minister, Sergio Massa, officially took over the reins of his new “superministry” on Wednesday, hoping he will announce spending cuts to calm markets amid a deepening crisis economic.
The South American country’s large budget deficit, exacerbated by years of overspending, runaway inflation, high debt and a struggling peso all await Massa, Argentina’s third economic chief in the past month.
A former congress leader and advocate for the ruling Peronist coalition, Massa was sworn in by President Alberto Fernandez in Buenos Aires. He has been is expected to deliver a speech later on Wednesday where further spending cuts as well as measures to stimulate dwindling foreign exchange reserves are expected to be announced.
Some local markets appeared encouraged on Wednesday ahead of the expected announcements. Argentina’s main stock index S&P Merval closed up 1.43%, just ahead of Massa’s swearing-in.
Sovereign bonds, however, fell 0.4% as the informal black market peso ARSB= weakened 2.35% to trade at 298 pesos to the US dollar.
Warring factions of the centre-left governing coalition have united behind Massa, seen by many as perhaps Fernandez’s last chance to stem the economic haemorrhage that has damaged the government’s popularity ahead of the presidential vote for the ‘next year.
“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 expected to lead a significantly expanded economy ministry, in which the agriculture, production and trade secretariats will answer to him.
His rise to the top economic policy post follows the abrupt resignation of former economy minister Martin Guzman in early July, and then Guzman’s successor, Silvina Batakis, only lasted a few weeks after him in that role. .
(Reporting by Nicolas Misculin; Editing by Deepa Babington and Alistair Bell)
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