El Nino may cost the world $450 billion: These 3 countries face 60% of losses
The Super El Nino currently heating up the Pacific could wipe out an estimated $451 billion from the global economy in 2027, with India, the US and China together accounting for almost 60% of the projected losses, according to a new Allianz Research report.
The estimate comes as the 2026 record El Nino is already developing over the Pacific and is expected to strengthen through 2026 and persist into early 2027, with most of the estimated economic impact falling in 2027. Firefighters work to extinguish an advancing wildfire near Zamora Province, Spain. (Photo: Reuters)
The Allianz Climate Economics Report 2026 estimates that China could face a gross output loss of $147 billion, followed by the US at $91 billion and India at $50 billion.
Together, the three economies account for almost 60% of the gross losses. Residents walk behind houses covered in mud and debris after Nepal flash floods. (Photo: PTI)
Furthermore, the study put the total global loss at 0.24% of projected GDP across 144 economies.
Allianz's estimates are based on how countries' economies responded to temperature changes during the 2023-24 El Nino episode.WHY IS EL NINO SO EXPENSIVE?
El Nino is a natural climate pattern marked by unusually warm waters in the central and eastern tropical Pacific.
Although it begins thousands of kilometres from India, it can disrupt atmospheric circulation and alter temperatures and rainfall across large parts of the world. A patch of a warm Pacific Ocean caused by El Nino is captured by a satellite image. (Photo: Windy) These disruptions are something most nations follow closely because the consequent higher temperatures, or other weather variablities, can affect how much people work, how much crops are produced and how much energy is needed for cooling.
Importantly, the $451 billion figure captures the estimated impact of temperature changes on economic output.
It, however, does not include additional losses from floods, droughts, wildfires and other extreme events. Houses damaged by flash floods are in seen in Nepal. (Photo: AP) INDIA COULD GET A HEFTY CLIMATE BILL
For India, the report estimates a $50 billion loss in 2027 alone, making the world's most populous country one of the three nations with the largest absolute projected losses, although the impact varies considerably between economies when measured against their size.
South Korea and Indonesia, for instance, face larger proportional declines, estimated at 0.51% and 0.41% of baseline GDP respectively. People walk in an area affected by flash floods following heavy rains in Indonesia. (Photo: Reuters)
Meanwhile, the estimated loss for the European Union's 27 member states is $24 billion, equivalent to 0.09% of GDP.
The economic pressure could also reach households through prices people could be forced to pay.
Allianz estimates that the El Nino shock could raise global headline inflation by an average 0.42 percentage points and food inflation by 0.65 percentage points.CLIMATE CHANGE COMES WITH A PRICE
The warning also comes against a broader backdrop of rising climate costs, as each climate disaster comes with a multibillion-dollar bill. Mud and debris flow down following a landslide triggered by continuous rainfall in Sikkim. (Photo: PTI)
For instance, according to the report, extreme weather events caused $210 billion in economic losses globally in 2025.
Although that was 32% lower than the $307 billion recorded in 2024, it remained 20% above the 2000-2019 average.
The report stresses that the El Nino calculation is a sensitivity analysis, not a prediction of the exact economic damage that will occur. The estimates also leave out the potentially much larger costs of extreme weather that may accompany the climate event.- Ends
