In the 2021/22 season the rise in wheat production helped to offset the fall in soybean and maize output. This will not be the case this year, with wheat production expected to drop by over 40%, owing to the drought and late frosts.
- The expected fall in agricultural output will undermine economic activity and increase inflationary pressures in 2023.
- A deteriorating outlook will undermine the governing coalition’s ambition to retain power next year.
- Falling export earnings will increase currency depreciation pressures, potentially implying new import restrictions.
- Declining export tax revenues will undermine efforts to reduce the primary deficit in 2023.