IMPACT OF NATURAL DISASTER ON ECONOMIC GROWTH IN SELECTED COUNTRIES IN SADC

Abstract

Climate change has increased the frequency and intensity of natural disasters. Does this translate into increased economic damages? To date, Empirical evidence has reported conflicting results in terms of the impact of disasters on economic growth. This paper aims to examine the impact of natural disasters on economic growth. It aims to contribute to a fairly limited literature on the economy-wide consequences of natural disasters in the short, medium, and long term (up to 17 years). Based on panel data consisting of eight countries over the period 2002–2019, it looks at the growth effects of two types of natural disasters, namely, flood intensity, and drought intensity that were explored using the Feasible Generalised Least Square (FGLS) approach. The study explores the impact of disaster intensity in the year the disaster occurred and the post-year to see if the consequence persists. The results indicate that flood intensity has a diverse economic impact on economic growth in the year of disaster and turns out positive in the post-year, while drought intensity was found to have no significant impact on the economic growth rate.