The International Monetary Fund pointed out the meteorological phenomenon as one of the main risks for South America.
He International Monetary Fund (IMF) presented his report Economic outlook for the Americas in Marrakesh, Morocco, and warned about the economic impact that the phenomenon of The boy in the growth of regional economies, what can happen in Uruguay?
The country has just overcome—although its effects are still felt, above all, in the agro— the worst drought of the last century; Therefore, it remains alert to possible meteorological phenomena that may once again affect the main sector of the national economy. In this sense, the fact that the IMF mentions El Niño in its report will not go unnoticed: if one of the most important economic organizations in the world points to its possible threats, it is essential to consider this variable in projections at the local level.
In fact, one of the main risks that the Fund identified for South America is the negative impact that El Niño can have on the economic activity, not because of a water deficit but because of the flooding that it may cause.
What can happen in Uruguay?
Although the IMF report indicates Ecuador and the north of Peru as the sites that may be the most affected by the meteorological phenomenon in the region; and, in return, he assures that “countries like Argentina, Paraguay and Uruguay they may benefit from a much-needed increase in rainfall”; In the country it is known that nothing in excess is good: neither is water – even despite having experienced a true crisis due to the lack of it.
Floods can also wreak havoc in the countryside, eroding soils, ruining crops and even causing the death of animals. Likewise, measures to alleviate climate consequences represent a significant increase in spending for the government, mainly in support and promotion policies for the affected sectors.
He budget of the State could also be affected by the increase in food prices in the local market; as well as a reduction in the quotas of export due to the impossibility of agro to produce, which would lead to a decrease in income – with the possible imbalance in the consequent trade balance.
These risks were already warned in August by the financial rating agency Moody’s, pointing out the “credit stress” that El Niño can generate in Latin American countries and, therefore, in Uruguay, whose growth projections for this year are already quite moderate: around 1%, according to the estimates of several international organizations – among them, the IMF .
Although by 2024 the Fund foresees a growth of the 3.2% of the Gross Domestic Product (GDP) of Uruguay, The meteorological phenomena that may occur during spring and summer will be decisive for the effective fulfillment of these economic projections.
Source: Ambito
