Record Super El Niño Could Cost $4T in Economic Losses
Asia would likely be hit the hardest, the report says, with China, India, Pakistan and Southeast Asia accounting for two-thirds...
A record-strength Super El Niño could potentially cost the global economy $4 trillion in losses, according to Oxford Economics. The economic impact of this extreme weather phenomenon is projected to reduce world GDP by 0.6% in 2027, and deepen to an 0.8% drop in the following year. The primary drivers of these losses include reduced agricultural output due to smaller harvests, decreased labor hours due to extreme heat, damage to infrastructure from floods, shipping disruptions, and reduced household spending.
While food prices globally may stabilize within a couple of years, the drag on productivity will persist for a longer period, as lost incomes and savings heavily impact investments. The report warns that global GDP could remain 0.7% below its potential level in 2031, even once the immediate disruptions have subsided.
Asia is expected to bear the brunt of the economic fallout, with China, India, Pakistan, and Southeast Asia collectively accounting for two-thirds of the projected decline in global output. African economies, too, are likely to experience sharp increases in consumer prices, as rising food costs strain households that already allocate a significant portion of their budget to food.
Advanced economies, however, are anticipated to face relatively modest impacts, primarily stemming from disrupted trade, higher food prices, and more cautious spending by consumers and businesses. These economies are also expected to recover within a few years, while the lasting productivity losses will continue to weigh on output in the hardest-hit emerging economies.
The Weather Channel reports that the current Super El Niño is already nearing record strengths, with ocean temperatures in certain parts of the Pacific Ocean reaching 1.97 degrees above historical averages between August and October. Although this is short of the all-time record of 2.4 degrees above average, set between December 1982 and February 1983, the National Oceanic and Atmospheric Administration warns that there remains a high likelihood of an historic event that would surpass the strength of previous El Niño events since 1950.
Written by urgent.news from Supply Chain Brain's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
