The Institute of Applied Economic Research (IPEA) lowered its forecast for the growth of the Gross Domestic Product (GDP) of the Brazilian agricultural sector. The estimate of high added value fell from 2.8%, according to the forecast released in December 2021 by Ipea, to 1%, according to data released today (22).
The drop was mainly caused by the forecast of the value added of the agricultural sector, which fell from 2.6% in December to 0.3% this month, due to factors such as the drought in the south of the country, São Paulo and Mato Grosso do Sul, that had an impact on soybean production.
The drop in soybean production this year should reach 35.8% in Rio Grande do Sul and 40.7% in Paraná.
The estimated increases in the production of corn (23.9%) and sugarcane (20.6%) prevented a greater drop in the forecast of agricultural GDP. However, according to Ipea, a possible climate problem that affects these crops could result in a drop in agricultural value added.4
The estimate for livestock value added growth also dropped, but more moderately, from 3.6% in December to 3% this month.
The document released by Ipea considered that the biggest risk for the livestock sector is the reduction in demand for animal proteins due to the increase in prices and the expectation of a little heated economic activity in 2022.
