Argentina's Massa sworn in as economy chief, budget cuts expected

Argentina's latest economy minister, Sergio Massa, formally took the reins of his newly-dubbed "superministry" on Wednesday, with expectations that he will announce spending cuts to calm markets amid a deepening economic crisis.

Argentina's latest economy minister, Sergio Massa, formally took the reins of his newly-dubbed "superministry" on Wednesday, with expectations that he will announce spending cuts to calm markets amid a deepening economic crisis. The South American country's large fiscal deficit, exacerbated by years of overspending, raging inflation, high debt and an ailing peso currency all await Massa, Argentina's third economic chief in just the past month.

A former congressional leader and lawyer from the ruling Peronist coalition, Massa was sworn in by President Alberto Fernandez in Buenos Aires. He was scheduled to give a speech later on Wednesday where new spending cuts as well as measures to boost dwindling foreign reserves are expected to be announced. Some local markets appeared encouraged on Wednesday ahead of the expected announcements. Argentina's main S&P Merval stock index closed up 1.43%, just ahead of Massa taking the oath of office.

Sovereign bonds, though, fell 0.4% while the informal black market peso weakened 2.35% to trade at 298 pesos per U.S. dollar. The center-left governing coalition's warring factions have united behind Massa, seen by many as perhaps Fernandez's last chance to stanch economic bleeding that has hurt the government's popularity ahead of next year's presidential vote.

"The economy is in a difficult situation, with a very complicated global context," Juan Manzur, Fernandez's chief of staff, told reporters. "But in spite of all our problems, we have confidence in him." Massa is set to lead a vastly expanded economy ministry, in which the agriculture, production and trade secretariats will answer to him.

His ascension to the top economic policy job 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 the role.

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