Argentines traveling by bus or metro in Buenos Aires are being given a choice: pay 59 pesos (17 cents) for a subsidized ticket or 700 pesos ($2) full price. It is an easy decision.
Days ahead of the country's presidential election, the under-fire government has rolled out a campaign in part to highlight the potential impact of losing state payouts, hoping to bolster their candidate against two rivals on the right more in favor of spending cuts.
Laura Abram, a housewife in Buenos Aires, said when she was paying the usual 59 pesos fare a message popped up on the screen showing 700 pesos, the new price if users decline state subsidies. Reuters observed the same message on a bus in Buenos Aires on Thursday.
"No one is going to choose that. It is impossible to pay that," Abram said on the street corner of her daughter's school in a residential neighborhood of Buenos Aires. Using public transportation to drop the kids off at school would be "unviable" without the subsidies, she said.
"People are not going to be able to go to work, or there is going to be a bicycle revolution and the city is going to be chaos."
The country will vote for the next president on Sunday in a race between libertarian front-runner Javier Milei, ruling party Economy Minister Sergio Massa and conservative Patricia Bullrich during the worst economic crisis in decades. Milei and Bullrich both promise to drastically cut state spending to close the fiscal deficit.
Massa, who represents the traditionally leftist Peronists, focused on subsidies as a major campaign issue in the days before polls open.
"Tell people that Patricia Bullrich and Javier Milei's proposal brings the bus ticket to 700 pesos and the train to 1,100 pesos," Massa said to journalists.
State subsidies for energy and transportation in 2022 represented 2.6% of the gross domestic product, said economist Santiago Manoukian at the consulting firm Ecolatina. This is a key expense in a country that registers a significant fiscal deficit, negative central bank reserves, and escalating inflation that could reach 180% in 2023.
"Economic subsidies are one of the main items that the next government will focus on reducing in pursuit of the necessary fiscal balance that the country needs," Manoukian said.
He suggested an opt-in subsidy program. "The desirable thing would be for subsidies to be removed or strongly reduced and eventually the population that needs it asks for it," he said.
($1 = 350 Argentine pesos)
