Argentina's drought will lead to a larger economic contraction in 2023 than previously anticipated, according to analysts at Itaú Unibanco Holding SA, who cut their GDP estimates from minus 1.5 percent to minus three percent.
Analysts, led by João Pedro Bumachar, used forecasts from the Buenos Aires Grain Exchange of a 20 percent drop in soybean and corn production for their revision, according to a report. They also considered the effects of "tighter import controls" aimed at protecting the country's foreign exchange reserves.
On Wednesday, the US also pointed to a 20 percent drop in soybean production this year since its February report.
Argentina is the world's top exporter of soybean meal and oil and the lower output will mean a smaller-than-expected inflow of much-needed dollars to shore up its foreign exchange reserves and meet a programme with the International Monetary Fund.
by Carolina Millán, Bloomberg