Hurricane Ian would impact U.S. economic growth through the end of 2022, according to experts.
However, the process of rebuilding destroyed areas will increase economic output in the following years.
According to a preliminary estimate from Fitch Ratings, the hurricane rapidly expanded, devastating towns along Florida’s southwest coast. The storm resulted in initial losses of between $25 billion and $40 billion. In addition, the restoration of the economy will be slowed by widespread power outages, blocked airports, and inaccessible roads. As the hurricane approached Georgia and South Carolina on Friday, it left a trail of destroyed homes and streets.
“I expect people will stop going to restaurants for a while, the nightlife in Tampa will probably not be the same, and there might be some businesses that are forced to close,” said Tatyana Deryugina, an economist at the University of Illinois Urbana-Champaign. “On the other hand, there will be destroyed cars, destroyed housing that needs to be rebuilt, and people will go out and spend, and that will drive GDP up.”
The shortage of construction workers and materials, which has driven up prices, is one issue that could complicate and extend Florida’s rebuilding process. In August, compared to the prior year, the cost that producers pay for materials used in residential buildings increased by 10.6%. Although it has dropped since last year, the rate of growth is still significantly higher than it was before the pandemic.
The fact that Florida is accustomed to tropical storms offers one advantage. The state put aside $2 billion in May to aid insurance companies in processing claims, and tens of thousands of first-responders rushed to help those in need.
According to economists, most natural disasters, including hurricanes, have rather short-term economic effects. However, hurricanes bring immediate destruction, taking away homes and ravaging entire cities on their paths.
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