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People bang pots during a protest against the increases in electricity and gas prices in Buenos Aires, Argentina, July 14, 2016. The placard reads "Macri (President Mauricio Macri) liar go out". REUTERS/Enrique Marcarian

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By Mitra Taj

BUENOS AIRES (Reuters) - Thousands of Argentines banged pots and marched through public squares in the rain on Thursday to protest steep hikes to basic services after President Maurcio Macri slashed subsidies for utilities.

The demonstration marked the first "cacerolazo" in centre-right Macri's government, evoking memories of the pot-banging protests staged by struggling Argentines during the country's economic meltdown at the start of the century.

Macri announced plans for higher utility rates shortly after taking office in December, part of an austerity plan to trim billions in subsidies from the fiscal deficit.

But with wages stagnant and scant job prospects in an economy mired in recession, many Argentines say they cannot afford to pay utility bills that in some cases have jumped by more than 1,000 percent.

"It's abusive, it's completely excessive," said Fernando Monton, a 39-year-old print shop employee who says 30 percent of his salary now goes to paying gas, electricity and water fees.

Protesters marched around the Obelisco, a monument in downtown Buenos Aires, unfurling the country's sky blue and white flag as they struck metal pots and chanted insults at Macri.

Macri has asked Argentines to be patient while his free-market economic reforms take time to bear fruit following years of government controls and swelling budget deficits under his free-spending predecessor Cristina Fernandez.

But Macri's government has acknowledged that some utility rates went up too much. His cabinet this week set a 400 percent cap on increases to natural gas bills for consumers as it prepared to challenge a court injunction that suspended them.

"It's still too much! With everything else going up also, it's unreal," said 57-year-old housekeeper Catalina Diaz, who added she has barely used her heater since receiving a 1,000 peso ($68) gas bill, up from 200 pesos last year.

Despite making just $400 per month, Diaz said she was not eligible for assistance for paying gas bills that the government promised for low-income households.

Macri has urged Argentines to strive to conserve energy as the country weans itself off cheap natural gas made possible by years of frozen fees that he said left the grid on the brink of collapse.

After lowering export taxes, ditching trade and currency controls and cutting the public payroll in a bid to lure private investments, Macri says the economy will start to turn around in the second half of 2016.

(Reporting By Mitra Taj; Editing by Shri Navaratnam)

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