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Hector Daer, secretary general of Argentina's National General Confederation of Labor (CGT), addresses the crowd during a broad march in solidarity with striking teachers in Buenos Aires, Argentina March 7, 2017. The sign reads "Strike now." REUTERS/Martin Acosta


BUENOS AIRES (Reuters) - Workers represented by Argentina's main labour union gathered on the streets of Buenos Aires on Tuesday to protest job cuts and pay raises that have not kept up with inflation, challenging the government seven months ahead of key congressional elections.

The one-day picket, which attracted tens of thousands of demonstrators, was the first march by the CGT umbrella labour group this year. It came amid a two-day teachers' strike that on Monday delayed the opening of school after the Southern Hemisphere summer holidays.

Mauricio Macri became Argentina's president in late 2015, vowing to jumpstart the economy through fiscal reforms aimed at attracting sorely-needed investment.

But the promised wave of foreign direct investment has been slow to manifest itself as inflation, while moderating, remains in the double digits.

Consumer prices rose by about 40 percent last year. The central bank hopes to cut that rate by more than half in 2017.

Employers have been hard-pressed to raise pay packages in line with inflation while Macri's push to cut business costs has prompted layoffs in the public and private sectors.

"The layoffs have continued and deepened since January," CGT spokesman Julio Piumato told Reuters.

The discontent comes at a bad time for Macri, who needs his Cambiemos political coalition to do well in October's mid-term elections in order for him to keep pushing his economic reforms through Congress and position himself for re-election in 2019.

A group of CGT demonstrators shouted for a general strike to be called. But their leaders declined to confirm that a nationwide work stoppage was being planned, prompting shouts of "traitors" and "set a date for the strike" from some members.

Television images showed fist fights among CGT factions that disagreed over strategies for pressuring the government, which dismissed the protest as a political stunt.

"This year electoral politics is getting mixed up with the labour agenda, which we have to negotiate together," cabinet chief Marcos Pena Tweeted

Teachers, some of whom joined Tuesday's CGT march, are demanding salary increases that make up for the purchasing power lost to inflation last year. In Buenos Aires province they want a 35 percent pay hike for 2017. Governor Maria Eugenia Vidal, a close Macri ally, has offered them an 18 percent raise.

(Reporting by Nicolás Misculin, writing by Hugh Bronstein; Editing by Bernard Orr and Cynthia Osterman)

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