Falling global GDP surrounding worldwide pandemic likely to weaken U.S. agricultural exports in 2020
The toll of the COVID-19 pandemic on the global economy is expected to cause the world’s gross domestic product (GDP) to decline in 2020 for the first time since 2009. Because GDP is expected to shrink in some of the United States’ foremost agricultural export destinations, U.S. agricultural exports are expected to fall as a result of the reduction in overseas demand for agricultural goods. According to the Economic Research Service’s (ERS’s) latest Outlook for U.S. Agricultural Trade, U.S. agricultural exports are projected down $0.5 billion from 2019 at $135 billion in fiscal year 2020. Across the world, GDP is forecast to fall by 5.2 percent (adjusted for inflation) during fiscal year 2020. GDP in the Asia and Oceania region, which comprises the largest proportion of U.S. agricultural exports, is expected to decline by more than 4 percent in 2020. In North America, GDP is expected to fall by 6.1 percent, largely because of the expected reductions in the GDPs of Canada and Mexico—the top two purchasing countries of U.S. agricultural exports. By 2021, however, a return to positive GDP growth rates is expected among most major trading regions, and exports are projected to increase $5 billion over 2020 to reach $140.5 billion in fiscal year 2021. This chart is drawn from ERS’s August 2020 Outlook for U.S. Agricultural Trade.
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