The Minister of Economy, Sergio Massa, expressed this Friday during his speech scheduled in the framework of the G20 meetings in India, that for Argentina is “a central issue” to put on the agenda of the organizations the cost of the war in Ukraineespecially for middle-income countries.
The official remarked that, for Argentina, “a central issue is that the same countries that in this area demand that we put on the agenda the seriousness of the damage of the war in economic matters, give their directors a mandate in multilateral organizations so that the countries that were economic victims are heard when we go to these forums”.
Massa traveled to India accompanied by a delegation made up of the head of the Central Bank, Miguel Pesce; the head of INDEC and the person in charge of relations with organizations, Marco Lavagna, and the Secretary of Energy, Flavia Royon.
There, in the city of Bengaluru, the AArgentina presented a report stating that the war in Ukraine caused important changes in the world economic scenario, and that it generated a negative effect of US$ 4.940 million on the trade balance.
Among the main causes that explained the unfavorable performance, the rise in international fuel prices (Bolivian Gas 114%, LNG 233%, Diesel 85% and Fuel Oil 63%) and the sharp increase in the cost of export freight were counted. specified Economy.
Regarding fuels, it was observed an additional increase in the value of imports of US$3,757 million in relation to the US$1,999 million projected at prewar prices.
In the same way, freight rates increased by US$1.8 billion in relation to the estimates prior to the war.
I share the report of the economic team on the impact of the war in Argentina.
— Sergio Massa (@SergioMassa) February 24, 2023
The official report highlighted the Government’s policies to moderate the impact of the growth of energy prices by mentioning the increase in local gas production; the renegotiation with YPFB of the Natural Gas contract from Bolivia; and the importation of electrical energy from Brazil at competitive prices with thermal generation.
Also highlighted was the decision of move “scheduled shutdowns of nuclear power plants” and the rule of “dynamic decision to alternate fuels to prioritize the cheapest in the face of peak requirements”.
The war between Russia and Ukraine also had an impact on the prices of some commodities that Argentina exports such as corn (17.8%), soybeans (9.4%) and wheat (33.7%).
Although these increases allowed him to the country to obtain an additional US$617 million, the amount was far from compensating the deficit generated by the increases in fuel imports and freight costs (US$5,557 million between them).
