Even in the worst scenario due to covid-19, agricultural GDP should rise by 1.3%, says Ipea

The Institute for Applied Economic Research (Ipea) estimates that even in the worst scenario regarding the impact of the new coronavirus pandemic, the Gross Domestic Product (GDP) of the agricultural sector will increase by 1.3% this year, as released this Tuesday , 26, in the entity's Charter.

The index reveals a slight drop in relation to the forecast increase of 1.4% estimated in the April Agro Bulletin. The new scenario includes a more positive result for crops, an increase of 2.8%, compared to 2.7% previously, but a drop of 2% for livestock, compared to a reduction of 1.5% in the April bulletin.

Taking into account this year's harvest forecasts from the Brazilian Institute of Geography and Statistics (IBGE), this growth could reach 2.5% this year, and with data from the National Supply Company (Conab), 2.3%.

“The Conjuncture Group simulated agricultural GDP for the stress scenario, in which part of production is more affected by adverse events, especially those related to the covid-19 pandemic,” said Ipea in the document.

From January to April 2020, data on foreign trade in the agribusiness chain show an increase of 7% in value, compared to the same period last year. In terms of imports of agricultural inputs, the drop was 16% in value in the same period. “Certainly the devaluation of the real of more than 20% contributed strongly to the drop in imports, including among the most important products for the sector”, stated Ipea.

Imports of agricultural pesticides fell by 12% in value and 16% in volume; fertilizers fell by 33% in value and 12% in volume; and that of heterocyclic compounds, used in the production of veterinary medicines, fell 23% in value and 22% in quantity.

Amid the pandemic, Ipea records that rural credit grew by 26.8% in total volume in the March-April two-month period, which according to the entity is the result of an effort by the government and entities that are part of the National Rural Registration System (SNCR ) to mitigate the impact of covid-19.

In April, the 12-month accumulated credit volume rose to R$ 189.5 billion, 1.8% higher than in March and 8.1% higher than in the same month of 2019.

Source: Industrial Pig Farming

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