Macri Reverts to Handouts in Bid to Change Tide in Argentina

(Bloomberg) -- Argentine President Mauricio Macri, who has spent years lambasting the populist, free-spending ways of his predecessor, is opening the purse strings to try to claw his way back into contention ahead of the Oct. 27 presidential elections.

Besides covering certain taxes for workers and paying out bonuses to the military and police, Macri said in Buenos Aires on Wednesday that he’ll also freeze gasoline prices for 90 days in a move reminiscent of previous administrations.

Macri said that he’s heard the message from disenchanted voters after losing to the opposition’s Alberto Fernandez by more than 15 points in Sunday primaries and admitted errors from his government while asking people to stick with him for one more term. He even compared the struggles by some families to make ends meet and pay bills as equivalent to climbing the Aconcagua, the highest peak in the Americas near the border with Argentina and Chile.

The bond market, which has entirely repriced Argentine risk this week and now sees a default as more likely than not in the coming years, continued to trend lower after he spoke.

The total cost of the government plan? 40 billion pesos. Which after the more than 20% devaluation this week, amounts to less than $700 million.

To contact the reporter on this story: Daniel Cancel in Sao Paulo at dcancel@bloomberg.net

To contact the editor responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net

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