In this sense, the head of the MEF, lily arbelechepointed out that “it is difficult to estimate an exact projection of performance of the GDP, because it is necessary to see what will be the effective impact of the drought”, during the presentation of the new estimates for the evolution of the Uruguayan economy.
Although he recognized that the water deficit will have an impact on economic development —which is presumed to result in lower growth, but also with less deficit and inflation—; He affirmed that it is early to draw conclusions and that another series of elements, such as the uncertainty of the global economy, are just as important when making projections.
For its part, the BCU estimated that the effects of the drought on prices will be “transients”, as could be seen in the document after the meeting of the Monetary Policy Committee (Copom). In this sense, although he recognized a possible upward pressure, he estimated that the effect on the Consumer Price Index (CPI) it will not be of a permanent or extensive nature.
The first projections of the MGAP
Unlike the moderation that prevailed in the MEF and the BCU, the MGAP —which was the first State sector to estimate the impact of the drought on the economy— projected a much more catastrophic immediate future, especially for the agro.
In this sense, the portfolio led by Fernando Mattos estimated a fall in the Agricultural Gross Domestic Product (GDP) of 1.7%, as well as possible losses totaling around 1,175 million dollars due to water deficit.
These data were presented within the framework of a report prepared by the Office of Programming and Agricultural Policy (Opypa) that the ministry presented to the parliamentarians to explain the measures that are being taken to alleviate the impact of the drought on agricultural producers.
The considerable decrease in the production of cattle —due to the lower number of calf births—, of milk and of agricultural products —due to the reduction of planted areas and the loss of crops—, mark what, according to the MGAP, may be a complex year for the sector.
Source: Ambito
