This working paper discusses how current estimates of the effects of typhoons and droughts point to declines in national income compared to predisaster trends, with economic effects likely to persist up to two decades. Using typhoon landfall and damage data in Asia, it analyzes the wind–damage relationship and finds that damages to gross domestic product increase by 2.3% with an increase in maximum wind speed.
Developing Asian economies could expect dampened growth with significant impacts on agriculture and tourism, a concern that may roll back years of development gains and exacerbate inequality. To cope with increasing disaster risks, both short-term adaptation strategies like relocation, government transfers, and other social safety nets, as well as long-term strategies like disaster insurance or similar ex-ante mechanisms are needed.
Natural disaster shocks and macroeconomic growth in Asia: Evidence for typhoons and droughts. 2016. Mandaluyong City, Philippines: Asian Development Bank. Shared under a Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO).