Safe agriculture GDP this year, predicts consultancy – 03/16/2023 – Vaivém

Although the participation of agriculture is modest in the formation of GDP (Gross Domestic Product), the sector will be one of the drivers of the 1.3% increase in the economy this year.

In the evaluation of LCA Consultoria Econômica, the sectors that essentially depend on the expansion of supply have good perspectives, according to the bases of the GDP. Agriculture and mining are in this context and present exceptional perspectives for this year.

The two sectors should strongly push GDP upwards, especially in the first quarter. The grain production perspectives for this year are for a record harvest close to 310 million tons, with emphasis on the first months of the year.

The soy crop, whose harvest is already advancing, should reach 150 million tons, a level never recorded by the country. The corn harvest will follow, also with the promise of production above current standards, which could reach 125 million tons.

In the livestock sector, meat production rose to a new level last year and has prospects for continued growth this year.

In 2022, according to data from the IBGE (Brazilian Institute of Geography and Statistics), 26 million tons of proteins were produced, in the sum of chicken, beef and pork.

If agriculture and mining hold the GDP, some sectors more sensitive to economic policy, such as civil construction, investments and durable goods, may experience a strong slowdown.

With the reduction in the wage bill, non-durable goods should also be affected. The rate at which the employed population is increasing is losing pace. It’s better, but it grows slower.

The unemployment rate is stabilized, but the increase in informality represents less wage mass, since it reduces average wages.

Health care and education in the public network are less sensitive to economic policy. All of these elements explain the possibility of GDP retreating from a rate of 2.9% in 2022 to 1% this year, according to the LCA assessment, presented this Thursday (16).

After growth in the first quarter, the evolution throughout the year will be slower, according to the consulting analysts.

Taking some basic assumptions, the external scenario for this year may not be so complicated. The pandemic should no longer have an effect like that of previous years.

Furthermore, the conflict provoked by the Russians in Eastern Europe should not generate more serious problems than those already brought; and the control of inflation in rich countries should not be so aggressively responded to by governments, which reduces the possibility of a more pronounced recession.

In the domestic field, the fiscal framework and reforms may respond to challenges in a positive way. This could change the skepticism that affects Brazil.

But, in an adverse internal and external scenario, these hypotheses are reversed. If inflation does not subside abroad, and central banks tighten interest rates, the recession will be more intense.

Internally, there is the possibility of frustration with the new fiscal framework and with the reforms, which may not generate the desired confidence.

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