MEF: GDP could collapse to 0.5% in 2023 with an extraordinary El Niño

The Ministry of Economy and Finance (MEF) has provided that, if the Child occurs with extraordinary intensity, the GDP would fall to 0.5%. It is taken into account that this phenomenon will take place between the fourth quarter of the year and the summer of 2024, and, although it would be a blow to all sectors of the economy, fishing, agriculture and manufacturing would be the most affected.

“The current risk scenario considers the occurrence of the El Niño phenomenon of extraordinary intensity from 4Q 2023 to the summer of 2024 that would impact all sectors of the economy, mainly in the productive supply of primary sectors such as agriculture, fishing and primary manufacturing“, reads the Multiannual Macroeconomic Framework (2024-2027) approved by the Council of Ministers.

In more detail, it is indicated that the most affected sector would be fishing, since the second anchovy season of the year and the first of 2024 in the north-central zone would be cancelled. This would have a negative impact on primary manufacturing through the fishmeal processing line. In the agricultural sector, excess rainfall and high temperatures would generate crop losses, the appearance of pests, and would alter the vegetative cycle of some crops.

This way, the boy It will hit non-primary sectors through damage to infrastructure, such as homes and roads, and to basic services, such as water, electricity and sanitation. The transport of passengers and cargo will be limited, which will make it difficult to move personnel and supplies. Thus, the MEF estimates that the extraordinary El Niño phenomenon (FEN) would subtract 0.6% from GDP growth in 2023 and 1.7% in 2024. “Towards the next few years, the effect of the FEN would dissipate”it is required.