What economic data points are most important to monitor during a natural disaster?

OECD assessment of fiscal resilience to natural disasters for NZ was estimated at an annual average loss from disasters of approximately USD 832 million, which corresponds to 0.47% of GDP in 2007. Economic losses from major drought episodes in 2006 and 2012-13 were estimated at USD 544 million (0.9% of GDP) and USD 823 million, respectively. In light of the increasing frequency and severity of natural disasters, quantifying the economic losses resulting from these events has become an absolute necessity. Climate change contributes to more frequent and severe weather events, leading to greater economic impacts.

Disasters have recently witnessed steep rise in extreme events and so the losses of human, animal and economic assets. WMO status of climate report shows the rise in disaster in last decade has more than doubled up and so the losses.The developmental gains are grossly compromised. The loss of human capital and infrastructures are regressive to development. Just an example, DTE report released on 30 november 2023 reveals, India had disasters on each day of monsoon 2023. the economic loss due to disasters was 8% of GDP.The PDNA (Post Disaster Needs Assessment) of many disasters reveal huge economic losses. In addition,the reconstruction and rehabilitation needs huge funds. Every disaster brings down the GDP and national dividends.

Covid has been historical disaster which witnessed unprecedented loss of job and disrespect to labor force. Disasters not only inflict physical damage to industries, assets , human beings, but severe the supply chain management (SCM). The closure of industries, blockade of businesses, SCM and communication reduce employment opportunities and labor force from industries goes job less. Loss of employment constrains the labor force to migrate back home to a new place of livelihood. The displacement of labor force has cascading effect on their families, health, children education and psychological stress. Flip side of this is that every disaster offers opportunity. Reconstruction of cities like Bhuj showcased a resilient & vibrant city.

Inflation is most common phenomenon observed during disasters. This needs strong monitoring and arrangements to control it. A disaster hits the supply chain management and business continuity, more so goods of daily needs .This causes inflation in the rates of grocery and essential items.It is essential duty of local governments to assess pre-disaster needs and make arrangements to ensure availability of essential goods and make it accessible to all, specially economically weaker section and disaster hit citizens. Based on the frequency and impact of disasters, contingency planning is mandatory. Planning,Pre disaster rate contract,relief camps, alternative supply chain network and communication matters most to keep inflation under control.

Monitoring prices and inflation is crucial in understanding the economic impacts of natural disasters. IMF's research highlights how these events can significantly affect inflation through supply chain disruptions, leading to increased costs for goods and services. For example, droughts tend to have a more pronounced inflationary effect, while floods may have a dampening impact on inflation, suggesting a predominance of demand shocks in the latter case. Inflationary pressures can have widespread effects on the economy, affecting consumer purchasing power and overall stability. Understanding these dynamics is essential for determining economic impacts to implement effective policies during disasters. #EconomicImpact #Disasters #Inflation

Monitoring fiscal and monetary indicators during natural disasters is crucial for understanding their economic impact. For instance, the 2010 Chile earthquake resulted in damages and losses around 18% of GDP, significantly affecting the country's fiscal stance. Similarly, the Canterbury earthquakes in 2010 and 2011 led to approximately 20% of New Zealand's GDP in losses, impacting both fiscal and monetary indicators. These examples underscore the importance of monitoring these indicators to assess the economic impact and inform recovery strategies. #EconomicImpact #NaturalDisasters #FiscalMonetaryIndicators #OECD

Este indicador interfere em todos os outros ent?o é concerteza um dos mais importantes a ser levado em considera??o. Obrigada.

Fiscal pressure and budget deficits are important areas to consider during a natural disaster beyond traditional economic data points for several reasons: 1. Government Spending and Revenue-Natural disasters often lead to increased government spending while simultaneously reducing revenue as economic activity shrinks. 2. Fiscal Space-The ability of a government to respond to a disaster can be constrained by the available fiscal space. A muted expenditure response signals the absence of fiscal space. 3. Debt Dynamics-The monetary policy response to natural disasters often involves lowering domestic interest rates to boost the economy, reducing interest payments on debt and potentially improving the dynamics of the debt-to-GDP ratio.