Economist Alexandre Cabral, from NeoValue Investimentos, states that the 6.6% drop in GDP in the agricultural sector in 2016 was a “surprisingly bad” result. However, he believes that “at the end of 2017 this number could be excellent, as we have the possibility of a record harvest (despite all the flow problems, as highlighted by the Minister of Agriculture)”.
“In 2015, the sector had done very well, with an increase of 3.6%, helping our GDP not to be even worse than the -3.8% recorded. But what happened to the sector in 2016? We had some areas with a large drop in production and productivity, such as corn (-25.7%), sugar cane (-2.7%) and soybeans (-1.8%). Among the reasons for this poor performance, climate problems stand out, such as drought and frost in the countryside. A good part of the second corn harvest, for example, was lost due to frost”, explained the specialist on his Economy in sight blog.
Cabral highlights that in the last quarter of 2016 there are already signs of a reversal of expectations, with an increase of 1.0% – against 0.7% in the same period of 2015. “What worries me is this dollar at R$ 3.15. If this large appreciation that the real had last year continues in 2017, it could end up hindering the increase in revenue in the agricultural sector.
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