An extreme drought will shrink Argentina’s already ailing economy by three percentage points this year. “The drought has already cost three points of Argentina’s estimated gross domestic product,” the Rosario Grain Exchange (BCR) said in a report on Friday.
The parched acreage has resulted in losses of more than 50 million tons, Julio Calzada, head of economic research at the Rosario Stock Exchange, told Archyde.com on Thursday. He described the weather conditions as “unprecedented”.
Argentina is one of the largest grain producers and exporters in the world, particularly in staples like soybeans, corn, and wheat. The stock market estimates that the extreme drought will cut gross domestic product (GDP) by $19 billion in 2023 compared to the previous year.
The BCR also expects the drought to weigh heavily on the treasury as taxes on grain exports will fall by more than $2.3 billion in the 2022-2023 crop season. The tax revenue from exports makes an important contribution to the economy of the South American country, which suffers from low foreign exchange reserves, massive debt and annual inflation of over 100 percent.