The Growth Impact of Disasters in Developing Asia

It finds that severe disasters have the largest impact on small Pacific island economies, slowing annual growth by between 1 and 2 percentage points on average. This is not surprising given these economies’ extreme exposure, structural vulnerability, and small size relative to the footprint of major natural hazards. For other regions and globally, the growth impact is less clear. This is mainly because disaster effects tend to be highly localized and become diluted by cross-country regressions that use nationwide growth as the unit of analysis.