Agribusiness shrinks in December but grows 1.1% in 2022, according to study
Brazil’s agro-industrial production grew 1.1% in 2022, according to a monthly survey run by the Center for Agribusiness Studies (FGVAgro) at Fundação Getulio Vargas’ Sao Paulo School of Economics (FGV EESP). This expansion was due solely to the Food and Drink Products segment, which grew 2.5%. On the other hand, the Non-Food Products segment shrank 0.5%, year-over-year.
Although agricultural production expanded less than projected in 2022, it is important to stress that it outperformed other sectors, given that extractive industry and manufacturing shrank 3.2% and 0.4%, respectively.
Furthermore, it is worth noting that agriculture lost steam at the end of the year, registering its first decline (1.6%, year-over-year) in December 2022 since February 2022. This slowdown affected almost all agribusiness segments, which allows us to conclude that it reflects the national economy’s loss of dynamism more than any specific agriculture-related problems.
For 2023, the outlook is still uncertain. The domestic market will probably struggle to grow robustly, due to contractionary monetary policy, a possible slowdown in the labor market and political turbulence. Global economic growth is expected to be lower this year and this will affect Brazilian agribusiness. However, foreign trade could bring some relief, depending above all on the performance of the Chinese economy.