February 28, 2019 / 5:34 PM / 3 months ago

Argentina to hike minimum wage early as inflation stays high

BUENOS AIRES, Feb 28 (Reuters) - Argentina will hike its minimum wage earlier than planned as the government looks to bolster consumer spending power battered by stubbornly high inflation.

The labor ministry said in a statement on Thursday that the minimum monthly wage would increase to 12,500 pesos ($319.61) as of next month, rather than June as previously announced.

Recession-hit Argentina has been grappling to revive growth and rein in inflation that increased nearly 50 percent in 2018, hammering people’s savings and eroding consumer confidence.

The official statistics bureau said on Wednesday that economic activity slumped 7 percent in December and 2.6 percent last year. Inflation also ticked up 2.9 percent in January, lower than highs in October but faster than a month earlier.

On Thursday, Argentina’s central bank chief Guido Sandleris said inflation likely remained high in February, but added that the country had largely corrected issues hitting the economy including exchange rates, tariffs and the fiscal deficit.

“The imbalances that have impeded in the past a sustained lowering of inflation have been resolved or will soon be resolved,” he said in comments posted on the bank’s website.

President Mauricio Macri is facing a challenging year ahead as he looks to revive the economy, lower inflation and meet obligations with the International Monetary Fund tied to a $56.3 billion funding deal last year.

The center-right leader is also facing a challenge from the country’s powerful Peronist opposition ahead of presidential elections in October.

$1 = 39.1100 Argentine pesos Reporting by Adam Jourdan ane Eliana Raszewski; Editing by Tom Brown

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