OECD: Even if Latin America sells more commodities, the war’s impact is negative nonetheless

Even if Latin American countries benefit in the short term from the high commodity prices, Russia’s war with Ukraine will yield a negative impact for all economies nonetheless.

That was essentially the response of Mathis Cornmann, secretary-general of the Organization for Economic Cooperation and Development (OECD) when asked about the impact of Russia’s invasion of Ukraine on Latin American markets.

“In terms of global economics, the effects of this war are negative as a whole. But, notwithstanding, some commodity-exporting countries with less direct exposure to Russia and Ukraine will benefit from the high prices that will feed their export earnings and trade balances,” he said.

“Nonetheless, the aggregate global effect will be negative despite regional variations. That is certainly true,” added Cornmann.

Last week, the Ministry of Economy’s Foreign Trade Secretary, Lucas Ferraz, stated that it was still necessary to understand the extent of the impact of the G7 measure to bar imports from Russia.

Thus, Ferraz said that “in the short term, if tariff barriers for mineral and metallic commodities increase, as well as of cereals from Russia, it might be possible to see Brazilian exports to Europe, USA, and Canada boosted, strengthening our trading terms.

However, in the long term, the effects of the war will certainly negatively impact growth rates all around the world, compromising any short and medium-term sectoral gains.

Source: Valor Econômico

To read the full original article, please go to:

https://valor.globo.com/mundo/noticia/2022/03/17/ocde-amrica-latina-pode-vender-mais-commodities-mas-efeito-da-guerra-negativo.ghtml

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