: Immediate physical damage occurring at the time of the event, such as the destruction of infrastructure (roads, bridges, power lines), housing, and commercial assets.
Research identifies several long-term scenarios for an economy after a major shock: the impact of natural disasters on economic growth
Natural disasters exert a complex, often non-linear pressure on economic growth, characterized by immediate output shocks and long-term structural changes. While short-term GDP figures sometimes rebound due to reconstruction, these events typically lead to a permanent loss in the level of wealth and output, particularly in developing nations. Direct vs. Indirect Economic Impact : Immediate physical damage occurring at the time
: Some studies, including those by the Federal Reserve , find that severe disasters can depress GDP per capita for over a decade. Direct vs
: Large disasters can cause an immediate drop in output growth, with some estimates showing a 1.3% decline in the disaster year for significant events.
Data highlights several factors that reduce the negative impact on growth:
: More open economies can often substitute lost local production with imports, moderating aggregate impacts. Natural Hazards and Economic Growth