Water crisis could weaken GDP

The agricultural sector was the main driver in the Brazilian economy in the first quarter, but it may lose momentum and end 2021, leaving Brazil with a stable gross domestic product (GDP) after four consecutive years of growth.

Given the consolidation of crop failures estimations in crops such as corn, coffee, sugarcane, and oranges due to the low rainfall, the MBAgro consulting firm has already revised its forecast for 2021, originally a 2.5% to 3% expansion of the country’s GDP. The scenario could worsen if restrictions on the use of water, under study by the government due to the water crisis, are in fact adopted and affect the production of fruits and vegetables.

Soybeans, responsible for more than half of the record grain harvest in this 2020/21 cycle, have already been harvested and are not at risk, which minimizes the impact. But the risks for agriculture are clear and mapped by specialists and producers – who also warn of higher production costs for irrigated crops due to higher prices for electricity used to capture water.

Source: Valor Econômico

To read the full original article, access the link below:

https://valor.globo.com/agronegocios/noticia/2021/06/22/crise-hydrica-pode-segurar-o-pib-agricola.ghtml

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