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October 24, 2014
Monday, May 12, 2014

IMF recommends cuts in energy subsidies

The International Monetary Fund (IMF) has suggested that Argentina could benefit from cutting public spending destined for subsidies on energy costs, stating that such policies are "very costly and distort economic activity."

The organisation also recommended prudent fiscal policies in Latin America, as well as staying attentive to financial vulnerabilities and encouraging growth through social spending at a time when growth has spluttered in the region.

The chief of Regional Studies in the Southern Hemisphere Department, Dora Iakova, made clear her opinion of local policies during an event organised in Spain by the Areces Foundation, "Economic perspectives - The Americas (April 2014): growing challenges.

"[The subsidies] are very costly and distort economic activity," Iakova asserted, citing the cases of Bolivia, Ecuador, Argentina and Venezuela where the policy is active. 

The IMF's Western Hemisphere director Alejandro Werner also addressed the convention, predicting a sharp deceleration of growth in the region with an average of 2.5 percent in 2014 - the lowest in the last decade.

The official, however, did highlight the effects of financial, fiscal and monetary stability in the region.
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Tags:  IMF  Argentina  energy subsidies  Latin America  





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