Argentina’s drought will lead to further economic contraction in 2023 than previously expected, according to analysts at Itaú Unibanco Holding SA, who lowered their GDP estimates to -3% from -1.5%.
Analysts, led by João Pedro Bumachar, used forecasts from the Buenos Aires Grain Exchange of a 20% drop in soybean and corn production for their review, according to a report. They also considered the effects of “tighter import controls” aimed at protecting the country’s foreign exchange reserves.
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On Wednesday, the US also said a 20% decline in soybean production this year since its February report.
Argentina is the world’s leading exporter of soymeal and soybean oil and the lower production will mean a lower-than-expected inflow of much-needed dollars to prop up its foreign exchange reserves and comply with a program with the International Monetary Fund.
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