We invite you to read the new article on Ideas de Peso, a blog where economists working at the BCRA share their opinions:
The drought which adversely affected the soybean and corn harvest will show a reduction in the GPD of about 0.75 p.p. along 2018. Moreover, the relationship developed between farming and other productive sectors such as transport, commerce and industry brought about indirect effects. Hydric and thermal stress from December 2017 up to March 2018 affected the current agricultural cycle. As a consequence, corn and soybean production forecasts will decrease by 15% and 33%, respectively, against the previous harvest season. Due to corn and soybean harvest concentration between March and June each year, a fall of the seasonally adjusted GDP in the second quarter of 2018 and a partial or total recovery in the third quarter will become the most likely scenario.
Taking into account the expected trend of agricultural output and considering different scenarios for the rest of the economic sectors, the seasonally adjusted GDP will be contracted between 0.6% and 2.8% along the second quarter, moving in the opposite direction over the third quarter with an expected growth of 0.6% and 2.9% s.a.
The GDP for 2019 will show, given the temporary impact of drought, an important increase in the farming industry due to a recovery in corn and soybean production that reached levels similar to 2017.
June 4th, 2018