An extreme episode of the El Niño climate pattern could wipe $4 trillion off the global economy between late 2026 and 2031, according to a study by Oxford Economics.
The analysis, conducted by economist Beatrice Tanjangco, warns that disruptions to agriculture, infrastructure, and energy production could weigh on economic growth for several years.
The study projects that global gross domestic product (GDP) could fall 0.6% below its expected level in 2027 and 0.8% in 2028, with the shortfall still reaching 0.7% by 2031.
These figures reflect a hypothetical scenario involving an exceptionally severe event, rather than economic losses that have already occurred.
Climate Disruptions Threaten Food and Energy Production
The main economic consequences could include crop failures, infrastructure damage, disruptions to hydroelectric power generation, and adverse health impacts.
According to Oxford Economics, these disruptions could also weaken household spending and prompt businesses to postpone investments, extending the economic fallout even after the weather event subsides.
Which Regions Would Be Hit Hardest?
Asia would be the hardest-hit region, accounting for nearly two-thirds of the projected global output losses between 2027 and 2031.
Africa would account for approximately 4% of global losses, but the impact would still be substantial relative to the size of its economies.
In sub-Saharan Africa, economic output is projected to remain, on average, 1.7% below baseline forecasts between 2027 and 2031.
Agricultural disruptions and potentially higher food prices are among the major risks facing a region where many households depend directly on farming for their livelihoods.
To develop the projections, Tanjangco drew on the three strongest El Niño episodes on record: 1982–1983, 1997–1998, and 2015–2016.
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She then applied the Oxford Economics Global Economic Model and increased the estimated impacts by 10% to simulate an exceptionally severe event.
