Argentina to Boost Welfare Payments Ahead Of November Midterms

(Bloomberg) -- Argentina is preparing a package of economic measures to boost household incomes and consumer spending after the government suffered a damaging primary election defeat on Sunday, according to an official familiar with the plans. 

The measures are likely to include an increase to minimum social security payments and handouts to low-income parents in a program known as AUH, the official added, declining to be named because the measures aren’t public yet. Two other government officials confirmed that measures will be announced in the coming days, without providing details, with one of them saying no cabinet changes are expected at the moment. 

Read More: Argentina’s Ruling Coalition Dealt Blow in Midterm Wake-Up Call

President Alberto Fernandez is revamping his coalition’s election strategy after it lost primary races in most of Argentina’s provinces Sunday. The final midterm vote will be held on Nov. 14. 

An Economy Ministry spokesman didn’t respond to a request for comment. 

One of Fernandez’s congressional candidates, Leandro Santoro, said Monday night that measures would be announced Thursday, citing a conversation with the president, without providing more details. He said the principal issue the government needs to address is Argentines’ purchasing power. 

“Argentina needs this basically -- money in the streets, dollars in the central bank and conditions to reactivate spending,” Santoro said in a TV interview. 

Low-income households form the bedrock of the government’s support. The administration, which is locked out of international debt markets, has resorted to financial support from the central bank, which has printed 850 billion pesos ($8.7 billion) for the treasury so far this year. 

Through July, the primary fiscal deficit was 0.7% of gross domestic product, well below the government’s 4.5% budget target, giving authorities some leeway to boost spending. 

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