Argentina said on Wednesday it will review its popular energy subsidies for possible reductions, as the commodities-exporting country faces a more difficult world economic situation in the months ahead. The announcement - concerning billions of dollars in water, natural gas and electricity subsidies - was made by Economy Minister Amado Boudou just days after President Cristina Fernandez won a landslide re-election on October 23.
"This means redirecting the subsidy system," Boudou said. "In some cases they will be eliminated while others are partially reduced, or continued fully." Analysts had forecast that the government would target energy subsidies to rein in public spending that has been growing at an annual rate of more than 30 percent this year.
Most public service rates paid by companies and average Argentines have been frozen since 2002. Boudou said those rates will not go up despite the reduction in some subsidies. He did not explain how prices are to remain stable without the same subsidies.
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