The estimate of GDP-income of Brazilian agribusiness for 2018 was up 0.38% in July, but continues with negative performance of 0.85% in the accumulated of the year, according to studies of Cepea (Center for Advanced Studies in Applied Economics) of Esalq / USP, in partnership with CNA (Confederation of Agriculture and Livestock of Brazil).
The researchers from Cepea point out that the still adverse scenario in the accumulated income in agribusiness in 2018 is linked to the reduction of prices of agricultural products. While prices for agricultural products dropped sharply by the end of 2017 – with some recovery in 2018 – livestock declined over the course of the year as a consequence of the abrupt closure of important external markets for meat, beef, pork and poultry destinations – Brazilians. Add to this the slow recovery of Brazilian economic activity as a limiting factor for the warming of demand.
Since June, the rise in prices – particularly of agricultural products – has been more consistent, which in turn has reflected positive monthly results, both in the income generated in agribusiness as a whole and in the primary segment ). However, researchers from Cepea indicate that there is still no reversal of the negative performance in the accumulated of the year for the income of the sector.
Macroeconomic context
The Brazilian GDP should consolidate with growth in 2018, but with a result that was lower than expected by the market earlier this year. According to IBGE (Brazilian Institute of Geography and Statistics), Brazilian GDP grew 1.1% in the first half of 2018 in relation to the same period last year. According to the latest Focus report of the Central Bank (November 1 of this year), the estimate of growth for GDP, according to the average of the analysis of market agents, is 1.36% to 2018, well below the 3, 14% expected in the first report, released early in January.
According to researchers from Cepea, this low economic growth is accompanied by the maintenance of the high public deficit, the high unemployment rate and the fall in purchasing power of the Brazilian population, as well as the instabilities and market uncertainties associated with electoral speculation. This scenario is of concern for all Brazilian productive sectors, with emphasis on agribusiness, which has also suffered from cost increases.
This text was translated by machine from Brazilian Portuguese.