The onset of El Nino has been officially confirmed by the US meteorological forecasting agency and many signs show that this may be a very strong El Nino and also cause great damage.
Historically, the 1982-1983 El Nino caused damage of about 4,100 billion USD to global income, while the 1997-1998 El Nino caused the world economy to lose about 5,700 billion USD, according to a study published in 2023.
Mr. Justin Mankin - Associate Professor of Geography at Dartmouth University, USA, who studies the economic impact of El Nino - said: "Current forecasts show that this could be the most damaging El Nino ever recorded.
El Nino often slows global economic growth and causes losses of up to trillions of USD, mainly because this phenomenon creates extreme weather patterns that affect agriculture, infrastructure and supply chains.
According to experts, during the years of El Nino, global weather and climate changed dramatically, leading to a series of disasters such as severe floods, droughts causing crop failures, sharp declines in aquatic resources and increased tropical diseases.
It is noteworthy that most of the trillions of USD in losses did not come from immediate natural disaster damage.
Mr. Mankin's research shows that El Nino also reduced economic growth for many years after this phenomenon ended. Droughts, floods, heat waves and forest fires cause direct damage, but long-term costs stemming from them weaken economic growth foundations, including prolonged agricultural damage to subsequent crops, labor and production disruptions, market disruptions and the transportation industry.
Observing data shows that El Nino could cause the global economy to lose trillions of USD due to damage and reduced labor productivity. These losses have accumulated for many years and have the heaviest impact on countries whose weather is heavily dependent on El Nino," Mr. Mankin said.
According to him, the current El Nino could cause the world to lose trillions of USD, of which the United States alone could suffer losses of more than 1,800 billion USD by 2032.
However, because it is not yet possible to accurately determine how strong El Nino 2026 will be, it is still not possible to fully forecast the scale of damage.
In terms of absolute monetary value, current forecasts suggest this could be the most damaging El Nino in history," he said.
In addition, the global economy is currently significantly larger than the El Nino period before, which means that assets and economic activities are also at greater risk of being affected.
This is one of the reasons why El Nino in 1997-1998 caused more damage than in 1982-1983. Although a stronger El Nino means greater risk and scale of impact, the actual total damage will only be determined after many years because economic impacts often accumulate over time.
