Harvey, Irma estimated to cost $290 billion in US

Estimated cost amounts to 1.5 percent GDP

Övünç Kutlu   | 11.09.2017
Harvey, Irma estimated to cost $290 billion in US Flood submerges a road after Hurricane Harvey hit Texas, United States on August 28, 2017. ( Tharindu Nallaperuma - Anadolu Agency )

New York

By Ovunc Kutlu


Hurricanes Harvey and Irma are forecast to cost the U.S. $290 billion, weather services company AccuWeather said Monday.

The damage from Irma is estimated to be around $100 billion -- 0.5 percent of U.S. GDP of $19 trillion.

Harvey is expected to cost $190 billion, or 1 percent of GDP, according to AccuWeather.

"Together ... these two disasters amount to 1.5 of a percentage point of the GDP, which will about equal and therefore counter the natural growth of the economy for the period of mid-August through the end of the fourth quarter," Dr. Joel N. Myers, AccuWeather’s founder and chief said in a statement.

Myers said economic costs include business disruptions, damage to personal property and a rise in gasoline and heating oil prices.

He added that the hurricanes in Texas and Florida would increase unemployment in regions that are negatively impacted.

Due to Harvey and Irma, global investment banking firm Goldman Sachs on Saturday lowered its third quarter growth forecast of the U.S. economy to 2 percent from 2.8 percent.

"We expect a meaningful drag on key growth indicators over the next two months, including a temporary drag on September payrolls growth of 20,000 -- or as much as 100,000 -- if severe storm effects persist into next week," it said in a statement.

Goldman believes, however, a rebound in growth is possible because economic activity usually increases after natural disasters.

"We expect this weakness to reverse over the subsequent three quarters, more than recouping the lost output," it said, and increased the U.S. economy's growth forecast for the fourth quarter by 0.4 percentage points to 2.7 percent.

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