Record Super El Niño Could Cost $4T in Economic Losses
A record-strength Super El Niño could cut the world’s GDP by 0.6% in 2027, before deepening to an 0.8% drop in the following year, Oxford Economics warns.
In a report published on November 9, Oxford Economics projects that impacts from Super El Niño could lead to $4 trillion in cumulative losses from economic output. That would be driven by smaller harvests and fewer hours worked due to extreme heat, flood damage to buildings and roads, shipping disruptions, and reduced household spending.
Although food prices globally would likely settle within a couple years, impacts on productivity would drag on for longer, as lost incomes and savings weigh heavily on investments. As a result, global GDP could remain 0.7% below where it otherwise would have been in 2031, even after the immediate disruptions have faded.
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Asia would likely be hit the hardest, the report says, with China, India, Pakistan and Southeast Asia accounting for two-thirds of the projected fall in global output combined. African economies would also face some of the sharpest increases in consumer prices, as rising food costs squeeze households that already spend a large share of their budgets on food.
However, most advanced economics would experience relatively modest impacts, primarily tied to disrupted trade, higher food prices and more cautious spending by consumers and businesses. Most of those economies would recover within a few years, while lasting productivity losses would continue to weigh on output in harder-hit emerging economies.
According to The Weather Channel, the current Super El Niño is already nearing record strengths. Between August and October, ocean temperatures in parts of the Pacific Ocean were 1.97 degrees above historical averages. Although that’s short of the all time record for a three-month El Niño period of 2.4 degrees above average — set between December 1982 and February 1983 — the National Oceanic and Atmospheric warns that chances remain high for “an historic event that would exceed the strength of previous El Niño events dating back to 1950.”