Economy

Harvey One of Costliest Hurricanes in US History

Harvey One of Costliest Hurricanes in US Historyā€¯

US-BASED weather forecaster AccuWeather has estimated the economic cost from two Category 4 hurricanes that has hit the US to be US$290 billion, or 1.5 per cent of gross domestic product (GDP).

"We believe the damage estimate from Irma to be about $100 billion, among the costliest hurricanes of all time", said the firm's CEO and founder Joel Myers.

"Given potentially sizeable growth effects from Harvey - and with Irma risks now moving to center stage - we are lowering our Q3 GDP tracking estimate by 0.8pp to +2.0 percent", Goldman wrote.

What the hurricanes taketh away, they will more than giveth back to United States economic growth, according to economists at Goldman Sachs.

Mathias Eick EU  ECHO
Mathias Eick EU ECHO

Harvey, which battered Texas and parts of Louisiana in late August, will be "the costliest weather disaster in USA history at $190 billion or one full percentage point of GDP" which stands at $19 trillion.

Costs from the storm, which hammered Texas last month, will eclipse those associated with 2012's Hurricane Sandy, the bank's analysts wrote in a research note. "We also expect a near-term boost to headline inflation (around 0.2pp on the yoy rate) due to higher gasoline prices, and a possible modest boost to core inflation (worth less than 0.05pp), due to the destruction of some of the automotive capital stock".

"We expect this weakness to reverse over the subsequent three quarters, more than recouping the lost output".



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