Latin America Advisor
Energy Advisor
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Will Argentina’s New Economy Minister Shift Energy Policy?
President Alberto Fernández (left) this month named Silvina Batakis (right) as Argentina’s new economy minister, following the unexpected resignation of former Minister Martín Guzmán. // Photo: Argentine Government.
With Argentine Economy Minister Martín Guzmán’s July 2 resignation and the appointment of Silvina Batakis as his replacement, analysts are questioning the future of Argentina’s $44 billion debt restructuring deal with the International Monetary Fund, particularly as it relates to energy subsidies for consumers. While Guzmán wanted the government to reduce subsidies on electricity and gas bills at a slower pace than anticipated due to Russia’s invasion of Ukraine, Batakis has said those subsidies should be reduced “rapidly.” What will the change at Argentina’s finance ministry mean for the subsidies, and why is cutting them such an important part of Argentina’s deal with the IMF? What will having Batakis at the helm of the finance ministry mean for other parts of Argentina’s energy sector, such as the oil industry? What is the outlook for investment in the country’s energy sector, and how are factors such as inflation and the country’s exchange rate affecting investment?
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Claudio Loser, president and CEO of Centennial Group Latin America and former head of the Western Hemisphere department at the International Monetary Fund: “Minister Silvina Batakis still constitutes an economic unknown. However, her recent statements have brought some calm to the markets. The exit of Minister Guzmán was a traumatic event, worsening expectations about the government’s ability to pursue its program with the IMF. The new minister said she will continue to observe the agreed program, and her communications with the IMF managing director were positive. Batakis has indicated support for fiscal and monetary discipline, though she has defended the erroneous notion that the exchange rate system is in good shape…”
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A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewables, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere and beyond. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at ebrand@thedialogue.org.
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