Agricultural Surge: Brazil’s GDP Growth Driver for 2025

Brazil’s agricultural sector is poised for a remarkable year. The National Supply Company (Conab) projects a record-breaking grain harvest of 322.42 million tons for the 2024/2025 season.

This bumper crop brings relief to farmers and economists alike. The agricultural boom will significantly bolster Brazil’s economy. After a 3.5% decline until September last year, the agricultural GDP is set to rebound.

Analysts predict growth between 2.5% and 6% in the sector this year. This surge will likely offset slowdowns in industry and services. The Ministry of Finance’s latest macrofiscal bulletin forecasts a 6% increase in agricultural GDP for 2025.

This outpaces the overall GDP growth estimate of 2.5%. As a result, agriculture‘s share in the national GDP may expand beyond its usual 6.5% to 7% range. The record harvest could help ease food inflation pressures.

While meat, coffee, and sugar prices are expected to rise, increased grain production may stabilize or even lower prices. This balance could provide some relief to consumers and overall inflation rates.

Agricultural Surge: Brazil’s GDP Growth Driver for 2025. (Photo Internet reproduction)

The agricultural boom will also boost Brazil’s trade balance. Despite a 1.3% decline in agribusiness exports to $164.4 billion in 2024, prospects for 2025 look promising.

Agribusiness Drives Growth

The National Association of Cereal Exporters (Anec) projects an additional 16.9 million tons of soybean and corn exports this year. A strong dollar against the real, hovering around R$6, is likely to boost foreign exchange earnings from agricultural exports.

Market analysts predict a 5% increase in sector exports, driven mainly by soybean and corn sales. Agribusiness is expected to maintain its 50% share of national exports.

The agricultural sector’s performance becomes crucial amid fiscal uncertainties, rising interest rates, and a firm exchange rate. A super harvest could provide the necessary momentum for economic growth.

It could also boost key economic indicators. Even if the harvest merely surpasses last year’s figures, it would still play a vital role in sustaining the Brazilian economy.