Massa faces challenges on various fronts in Argentina

Significance

Royon, previously energy and mining minister for Salta province, replaces Dario Martinez, a close ally of Vice-President Cristina Fernandez de Kirchner (CFK) and a member of the pro-Kirchner La Campora grouping. Massa is seeking to impose his authority on the economic sector days after he replaced Silvina Batakis after her brief tenure at the Economy Ministry, but obstacles remain.

Impacts

• Long-delayed tariff increases will stoke inflation already likely to hit 90% this year.
• Dollar shortages have no rapid solution and will worsen shortages of imported goods, hitting prices and productivity.
• The uneasy Fernandez-CFK political diarchy will become an even more volatile trinity, potentially worsening tensions and policy uncertainty.
• Absent any significant near-term successes, Massa may again opt to depart rapidly so as to preserve his political capital.