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.

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.

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