September 20, 2019
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New minister right person for Argentina's economy, Macri says

Buenos Aires, Aug 18 (efe-epa).- President Mauricio Macri said Sunday that Hernan Lacunza "is the right person" to replace former Finance Minister Nicolas Dujovne, who resigned earlier this weekend.

"I asked Hernan Lacunza to run the Finance Ministry. Until today, he was a minister for the province of Buenos Aires, where he did a great job. His skill and career are widely recognized. I have confidence that he is the right person for this next stage," the president said on Twitter.

The government has not said when Lacunza, who holds a degree in economics, will be sworn in.

Before assuming his post in Buenos Aires province's government, Lacunza was general manager of the Central Bank and previously held a similar job at Banco Ciudad.

On Saturday, Dujovne submitted his resignation to the president following a week of turmoil in the financial markets in the wake of the governing party's poor showing in the Aug. 11 primaries.

"My thanks to @NicoDujovne for having been part of the team and for giving his commitment, skill and honesty in the service of transforming our beloved country," Macri said.

Media outlets had reported last week that Dujovne was on his way out of the Cabinet.

The former minister had not appeared in public since last Monday, when Argentina's latest financial crisis started, causing the peso to plunge in value and the stock market to post large losses.

Dujovne had been finance minister since 2017, a year in which the gross domestic product (GDP) grew 2.7 percent.

After the recession started in April 2018, Dujovne negotiated a controversial three-year, $56.3 billion stand-by agreement with the International Monetary Fund (IMF).

Under the terms of the agreement, the Macri administration had to impose sharp budget cuts.

The IMF has already disbursed $45 billion to Argentina and another $5.5 billion is scheduled to be disbursed before the end of the year, with the remaining funds being provided to the South American country in 2020.

The administration has not achieved the main goals set in the agreement - jump-starting the economy, reducing inflation and creating jobs.

Argentina's GDP fell 2.5 percent in 2018, according to the latest official figures available, and the economy contracted by 3.1 percent on a year-on-year basis in the January-May 2019 period.

The recession has been accompanied by a 47 percent inflation rate in 2018 and an inflation rate of 25.1 percent during the first seven months of this year.

Economists warn that the inflation rate could hit the 50 percent level this year due to the recent market instability.

On Wednesday, Macri announced a series of measures aimed at helping the middle class through the end of the year and took responsibility for his poor performance in the primary elections.

Among the measures announced by the president was a hike in the minimum wage to an unspecified level, a move that will benefit about 2 million workers.

The amount of the increase will be determined by the National Employment, Productivity and Minimum Wage Council, which includes representatives from the government, labor and business.

Macri said some of the measures were aimed at helping small- and mid-sized businesses.

The president said the government would increase funding for the Progresar scholarship program by 40 percent and freeze fuel prices for 90 days.

Public sector employees, armed forces members and security forces personnel will get a bonus of 5,000 pesos per month, Macri said.

In last Sunday's primaries, Peronist presidential candidate Alberto Fernandez finished 15 percentage points ahead of Macri.

Fernandez and vice presidential running mate Sen. Cristina Fernandez, who governed Argentina from 2007 to 2015, got 47 percent of the vote on the ticket of the Peronist Frente de Todos.

The 60-year-old Macri, who headed the ticket of the Juntos por el Cambio party, received just 32 percent of the vote, suffering a serious blow to his re-election chances.

Argentina will hold a general election on Oct. 27, with the next president being sworn in on Dec. 10 for a four-year term. EFE

Related content

Lacunza to be Argentina's new treasury minister as Dujovne quits

Buenos Aires, Aug 17 (efe-epa).- The economy minister for the province of Buenos Aires is set to become Argentina's treasury minister following the resignation of Nicolas Dujovne, government sources told EFE on Saturday.

The move comes after Dujovne presented his resignation in a letter to President Mauricio Macri following a financial crisis in the Argentinian market last week — an adverse reaction from investors to the ruling party's defeat in the presidential primaries on Aug. 11.

The government has not yet confirmed when Hernan Lacunza — former general manager of the country’s Central Bank and of the Bank of the City of Buenos Aires — will formally take charge.

In his resignation letter, Dujovne said he resigned “convinced that, in light of the circumstances, the administration that you (Macri) lead needs a significant renewal in the economic area.”

"My resignation is consistent with a government and political space that listens to the people and that acts accordingly," he added.

“We have made mistakes as well, without a doubt, we never hesitate to recognize that and did all that was possible to correct them,” he said.

Treasury minister since Jan. 2017, Dujovne had not made any public appearance since the crisis began last Monday which led to the Argentine peso and sovereign bonds falling to record lows.

Since Thursday, local media have reported speculation of the imminent exit of Dujovne, who was in office during a complex time for the Argentine economy where after growing 2.7 percent in 2017, went into recession in Apr. 2018, leading to aftershocks in all sectors of the economy.

Amid the crisis, Dujovne negotiated an unpopular 36-month, $56.3 billion bailout package from the International Monetary Fund under the commitment of strong fiscal tightening.

GDP fell some 2.5 percent in 2018 and according to the latest official data, economic activity accumulated year-on-year fell 3.1 percent in the first five months of the year.

The recession is combined with high inflation — 47% in 2018 — and an accumulated increase of 25.1 percent in the first seven months of this year, which is projected to go up to 50 percent, along with the economic instability observed in recent days.

According to analysts and a large part of the political spectrum, this scenario of recession and high inflation, combined with rising poverty and unemployment rates, greatly influenced the electoral setback suffered in last Sunday's primaries by Macri, who aspires to re-election in October. EFE

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