Mauricio Macri will begin his fightback for Argentina’s presidency on Wednesday with a plan to ease the economic pain of voters struggling with unemployment and inflation.

Attempting to recover from a scorching primary election defeat at the weekend that set off a market rout, Macri is set to unveil measures including a boost to child-care benefits, extra tax exemptions for lower-income Argentines, and special conditions for small and medium-sized companies to pay taxes, according to a government official familiar with the proposals.

The administration is also considering ways to increase the minimum wage and to contain fuel-price increases, said the person, requesting anonymity because the plan isn’t public. Macri is expected make an announcement Wednesday morning in Buenos Aires, the person said, adding that no approval from the International Monetary Fund will be necessary.

The measures are an attempt to reassure voters and stem the bleeding after investors reacted to Macri’s drubbing at the hands of Alberto Fernandez by dumping Argentine stocks, bonds and the peso. Fernandez, who is now the clear favorite to win October’s presidential elections, shrugged off any responsibility and said it’s up to Macri to deal with the market turmoil.

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A vendor sells Argentine flag souvenirs on the street in Buenos Aires, Argentina, on Tuesday, Aug. 13, 2019. In the wake of President Mauricio Macri's stunning rout in primary elections over the weekend, investors dumped its stocks, bonds and currency en masse, leaving much of Wall Street wondering whether the country was headed for yet another default. (Bloomberg News)

Macri’s Creation

“This is an issue the government created and the government has to resolve; we can’t do anything.” Fernandez told journalists outside his campaign headquarters Tuesday. “I hope they find the solution.”

The Argentine peso has weakened 19 per cent in the past two days as investors fear that Fernandez may adopt the type of interventionist policies that were common place during the government of former President Cristina Fernandez de Kirchner, now his running mate. The currency collapse is likely to fuel inflation that already runs around 50 per cent per year.

Voters on Sunday snubbed Macri’s market-friendly attempts to turn around the economy, and backed the Fernandez-Kirchner ticket to help them escape recession and austerity, compounded by a record US$56 billion IMF bailout Macri requested last year.

Macri said his economic advisers were working on possible measures during a Monday news conference in which he refused to throw in the towel. A press officer for the presidential palace did not immediately respond to Bloomberg’s request for comment on the measures outside of business hours.

Complicates Lives

Speaking to reporters on Tuesday, Fernandez declined to comment on Macri’s plans, saying that he didn’t want to complicate the situation for the president. He promised to help the government, depending on the measures announced.

“If the solutions appear and they favor the people, I’m going to help the government,” said Fernandez. “If the government doesn’t do well, it permanently complicates Argentines’ lives.”

Macri has said that the primary was a “message” from Argentines that he had heard. Still, political analysts say it will be extremely difficult for him to overcome the 15-point deficit to Fernandez before the Oct. 27 election.