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Argentina’s President Names Third Economy Minister in Less Than a Month

BUENOS AIRES—Argentine President Alberto Fernández, grappling with a political crisis within his ruling coalition, on Thursday fired the economy minister he appointed three weeks ago and replaced her with an influential lawmaker and ally as he faces economic turmoil.

Sergio Massa, currently president of the lower-house of Congress, will take over as economy minister, the president’s office said in a statement. The president also gave Mr. Massa control of agriculture and production policies, creating what Argentine analysts are calling a super ministry where all economic matters are decided, the statement said.

Mr. Massa, 50 years old, replaces Silvina Batakis, a little-known economist who was in Washington, D.C., on Monday meeting with the head of the International Monetary Fund, Kristalina Georgieva, to discuss efforts to tackle surging inflation by curbing public spending.

Ms. Batakis returned to Argentina on Friday after telling reporters in Washington that she had full political support within the government’s fractured coalition to implement politically unpopular economic policies. Ms. Georgieva had said via her Twitter account that it had been a productive meeting and welcomed Ms. Batakis’s efforts to “strengthen fiscal sustainability.”

Argentina recently refinanced a $44 billion bailout with the IMF in a deal aimed at averting a financial crisis by reducing public spending and printing money. But Argentina keeps printing money, with economists saying the country faces a sharp devaluation and accelerating inflation, now at 65%.

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Silvina Batakis took over Argentina’s top economic post earlier this month after the resignation of a moderate aligned with the president.

Photo: juan mabromata/Agence France-Presse/Getty Images

Mr. Massa, a lawyer by training who ran for president in 2015, will become Argentina’s third economy minister in less than a month after the surprise resignation of Ms. Batakis’s predecessor, Martín Guzmán.

Mr. Massa faces a sharply weakening currency, growing social unrest, and a political crisis within the government as far left members of the Peronist coalition led by former president Cristina Kirchner oppose public spending cuts that economists and the IMF say are necessary to stabilize the economy.

Eduardo Levy-Yeyati, a former central bank chief economist and current dean of Torcuato di Tella University’s School of Government in Buenos Aires, said it is unlikely that Mr. Massa will be able to undertake an economic overhaul.

“He is a populist with presidential ambitions, but even if he does a part of it, we can expect a mild rebound and a muddling through until mid-2023,” when presidential elections are held, said Mr. Levy-Yeyati. “If not, I am afraid the government has run out of replacements and the deterioration may only accelerate.”

Alberto Ramos, an economist at Goldman Sachs, said “a change of course is urgently needed” in Argentina, with someone with political clout leading the way. Massa appears to be “a more pragmatic individual with higher political capital and stature,” Mr. Ramos said.

He noted that Mr. Massa will still need to win the support of Mrs. Kirchner, the current vice president. Mrs. Kirchner and her supporters have opposed Argentina’s deal with the IMF to rein in the public deficit and reduce the money printing that is driving inflation.

“If Cristina Kirchner is not on board, it doesn’t really matter,” he said. “He needs to be able to overcome the political resistance that we’ve seen.”

Mr. Massa briefly served as Mrs. Kirchner’s cabinet chief during the start of her 8-year rule from 2007 to 2015.

He broke with Mrs. Kirchner in 2013, becoming an opponent of her administration after criticizing her attempts to run for a third term. In his 2015 run for the presidency, Mr. Massa called Mrs. Kirchner’s political movement a “fraud” that needed to be defeated. He finished third with about 20% of the ballots as Mauricio Macri, a center-right businessman, was elected.

He rejoined Mrs. Kirchner in 2019 as Peronists sought to mend their internal disputes and support Mr. Fernández’s presidential campaign against Mr. Macri. But the strife within the Peronists boiled over after they suffered a defeat during last year’s midterm elections, which Mrs. Kirchner blamed on efforts to curb spending. Her allies in Congress later voted against the IMF program to refinance Argentina’s debt.

The appointment on Thursday did little to assuage ordinary Argentines, who according to polls hold the government in low regard. Marco Franco, a taxi driver in Buenos Aires, voted for Mr. Fernández, but has lost hope that the government will improve the economy as he struggles to pay for repairs for his car.

“I feel let down,” he said. “I don’t believe in anybody.”

Write to Ryan Dube at ryan.dube@dowjones.com

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