Impact of the War in Ukraine on the Economy of El Salvador

Abstract

This research was guided by the research question: What is the impact of the war in Ukraine on the economy of El Salvador? This war has had a significant impact, even though the conflict is fundamentally between countries outside the American continent. However, because the Russian Federation was one of the leading suppliers of gas to Western European countries, the decision of the European Union and the US government to apply sanctions to the Slavic nation generated a boomerang effect that affected not only Europeans but also the United States and the rest of the world. The global situation affects most countries according to the conditions that exist in each one of them. These effects have been reflected internationally, reaching Latin America, particularly Central America. El Salvador, a country that does not have hydrocarbons, depends fundamentally on fuel purchases from abroad, especially from US companies. The first days that the sanction measures were applied the purchase of oil and gas from Russia was suspended, causing prices to skyrocket by $60 to $120, impacting fuel prices and generating a domino effect in the general prices. The repercussions were immediate in El Salvador, and fuel prices increased significantly, reaching $5 per gallon and diesel at $4.80. Due to this, the government of El Salvador had to take measures to stop the increase in fuel prices, such as the exemption of two fuel taxes.

This research addresses the context, including background, justification, corresponding research questions, and objectives. The methodological design, including the type of study, population and sample, definition and operationalization of concepts, methods, techniques, and instruments, as well as the data collection procedure and analysis of results, is explained.