The cost of the 2022/23 drought already amounts to US$ 10,425 million for soybean, wheat and corn producers and would erase 2.2 points of the estimated GDP for 2023 reported the Rosario Stock Exchange.
As detailed in the report, the drought has already cut the harvest of wheat, soybeans and corn by 28.5 million tons, 23% of the expected initial production.
The loss of net income from the producing sector amounts to US$ 10,425 million, only in these three crops, and the specialists estimated that it could still worsen if the rainfall deficit continues.
“This analysis takes into account both the loss of yields, as well as the hectares that were planted and that cannot be harvested, and those that could not even be planted due to lack of humidity” they completed the explanation.
The lower income of the productive sector due to the loss of production also results in fewer freight trips, less financial and intermediation services, less demand from the construction sector, etc.; In short, less investment and consumption that end up having an impact on general economic activity. This is what is called the multiplier effect of agriculture on consumption in Argentina.
Using this multiplier coefficient, the Rosario Stock Exchange calculated the loss of income of US$ 10,425 million from the primary sector will impact a drop in the Argentine Gross Domestic Product of US$ 14,190 million; that is, 2.2 percentage points of the estimated potential GDP for Argentina in 2023 according to the International Monetary Fund, which amounts to US$ 643,797 million.