Brazil faces R$ 110 billion annual GDP loss from climate crisis

Climate change is causing significant economic and fiscal damage in Brazil, with a study by the Celso Furtado International Center for Development Policies (Cicef) indicating that environmental disasters related to rain and drought cost the country approximately R$ 110 billion in annual GDP.

In a scenario of 2°C global warming, these losses could rise to R$ 144.6 billion annually, driven by a 42% increase in the number of municipalities affected by extreme droughts. Experts from the Institute of Climate and Society (iCS) emphasize that climate planning must be integrated into public budgets to manage macroeconomic and social risks.

The crisis also threatens the agribusiness sector's credit and insurance stability. Data from the Central Bank shows that 4,300 of Brazil's 5,572 municipalities experienced temperature increases between 2000 and 2023, while 4,326 saw reduced rainfall. Notably, 558 municipalities with the sharpest rainfall declines hold R$ 122.5 billion in active rural credit, representing over 17% of the national portfolio.

Furthermore, updates to the Agricultural Climate Risk Zoning (Zarc) show that planting windows have changed in 3,285 municipalities—nearly 59% of the country—altering the relationship between climate, production, and financing.