A powerful El Niño could go beyond routine weather forecasts and turn into a significant blow to the global economy. Expert warnings point to risks affecting supply chains, agricultural output and the cost of living, at a time when global markets remain sensitive to any shock.
Warning of a strong wave by the end of the year
According to climate experts, one of the strongest El Niño episodes recorded in nearly the past 140 years could emerge by the end of the year. The phenomenon, which usually appears every two to four years, is linked to warming waters in the Pacific Ocean and is associated with droughts, intense rainfall, flooding and extreme heat waves.
The risk is not limited to the weather. According to assessments cited by DW, a strong El Niño could raise living costs in many countries and turn into an economic problem with consequences lasting for years.
What such a phenomenon costs the economy
Climate expert Christopher Callahan estimates that previous episodes left severe financial consequences. According to him, the 1982-1983 El Niño caused more than $4 trillion in global economic losses, while the 1997-1998 episode brought about $5.7 trillion in losses.
These figures show that the consequences are not measured only by immediate damage. According to experts, the blow often extends beyond the moment of crisis, with economies facing slower growth and weak recovery even five to 10 years after severe climate events.
Agriculture and food on the front line
One of the most direct blows is expected to hit food production. India is facing extreme temperatures and a drought risk, while in Vietnam there have been signs of strong heat waves, rainfall increasing by up to 50% and major flooding.
If these developments translate into lower agricultural output, the impact is expected to be felt in international markets through higher food prices. The effects are also appearing in cocoa: in Ivory Coast, the world’s largest producer, sales have slowed and prices have risen amid fears that drought could damage future harvests. This could translate into higher chocolate prices for consumers.
Global trade and the hit to strategic routes
El Niño could also weigh on international trade. In Panama, low water levels have restricted the passage of ships through the Panama Canal, a key hub for the global movement of goods.
The consequences, according to reports, have been felt in slower trade and financial losses worth millions of dollars. This makes clear that such a climate phenomenon does not remain only an environmental issue, but becomes a direct problem for supply chains and the global economy.
Fishing, infrastructure and the limits of response
In Peru, the impact is clearly visible in the fishing sector. According to Christopher Callahan’s explanation, activity that depends on nutrient-rich waters from the depths of the Pacific can be blocked, hitting the local economy and the communities that depend on it.
Some countries have begun precautionary measures. Panama has prepared water-rationing plans to avoid another blockage in the canal, while Bangladesh has invested in scientific research and early warning systems. According to Professor Paul Roundy of the University at Albany, these interventions have helped reduce the number of storm victims, even though the economic cost remains a separate challenge.
El Niño is once again emerging as a serious test for economies and governments, not only for weather systems. If the scenario of a strong episode materializes, the blow could be felt from fields and ports to supermarket shelves.
At its core, the experts’ warning is clear: the weaker the preparation, the higher the economic and social bill could be.