Understand how GDP and agricultural growth are affected during times of crisis

Posted by Marina
Faced with the prospect of economic impacts with the advance of the new coronavirus pandemic in Brazil and worldwide, the financial market has reacted with concern. Now, the picture is different from 2008, when the crisis came from the financial system and not from external factors. However, that was the closest crisis to the current time.

DATAGRO analyzed how the national GDP and the growth of agriculture behaved during the years 2007, 2008 and 2009, according to data from the Brazilian Institute of Geography and Statistics (IBGE). Thus, it is possible to understand how an event of global proportions can affect Brazilian agribusiness. The sector's share of GDP has varied by around 5% in recent years.

Gross Domestic Product

Brazilian GDP had been growing since 2003 and maintained this movement even in 2008. When analyzing the years 2007 and 2008, GDP registered an increase of 6.1% and 5.1%, respectively, going from approximately R $ 2, 7 trillion to R $ 3.1 trillion reais. In 2009, the result was close to stability, with a decrease of 0.1%, and R $ 3.3 trillion.

Growth of Agriculture

Following the same pace as the national GDP, the agricultural sector also registered the same growth in 2007 and 2008 by 3.2% and 5.8%, respectively, going from R $ 120.1 billion to R $ 142.0 billion. However, in 2009, the GDP sector recorded a 3.7% decrease, totaling 149.21 billion.

COVID-19

The pandemic of the new coronavirus, COVID-19, started in China, more precisely in Wuhan and spread throughout the world in a few months. Since then, governments have endeavored to contain the disease in their territories with mandatory quarantines and social distance. In addition, economic measures are also applied to ensure jobs, income and credit for companies.

The unexpected crisis worries even the International Monetary Fund (IMF), which has already changed its growth estimates for the global economy, leaving it below 3%, the worst result since the 2008 crisis. However, the fund expects a recovery in 2021.

The efforts of the United States to ensure the functioning of the country even with a health crisis was the most notable. The authorities approved a package of US $ 2.2 trillion, about 10% of the country's GDP. The idea is to ensure the activity of companies, equip hospitals and secure jobs and unemployment insurance for the population.

In Brazil, GDP was recovering in recent years after consecutive declines and negative peaks in 2015, 2016, with a retraction of 3.5% and 3.3%, respectively, according to IBGE analyzes and data collected by DATAGRO . Economists still do not consider specifying how Brazil's economy will behave at this moment in the midst of the coronavirus.

The Brazilian government, however, has already announced a cut in the expectation of the Gross Domestic Product (GDP) of 2020, to a slight increase of 0.02% compared to an expected advance of 2.1% previously.



Source: DATAGRO