El Niño will be very bad for the economy. Here's why

Doyle Rice, USA TODAYSat, June 13, 2026 at 10:02 AM UTC

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The start of the El Niño climate pattern has officially been declared by federal forecasters, and signs are that it could be a "very strong" and very costly one.

Indeed, El Niño, a natural warming of Pacific Ocean water, can have a devastating impact on the world economy – to the tune of trillions of dollars around the globe – and the current pattern is likely to follow suit.

For example, the 1982-83 El Niño led to $4.1 trillion in global income losses, while the 1997-98 El Niño cost about $5.7 trillion, a 2023 study suggested.

"The current forecasts imply this could be the costliest El Niño on record," said Justin Mankin, a Dartmouth geography associate professor who studies El Niño's economic impacts.

How does El Niño impact the global economy?

El Niño tends to slow down global economic growth and cause trillions in losses, primarily due to the fact that it triggers disruptive weather patterns that impact agriculture, infrastructure, and supply chains.

In the years it forms, El Niño triggers wide-ranging changes in weather and climate patterns that result in a potpourri of global disasters, including devastating floods, crop-killing droughts, plummeting fish populations and an uptick in tropical diseases worldwide, experts say.

"El Niño is a major driver of global weather and climate patterns," said World Meteorological Organization Secretary-General Celeste Saulo, in a recent statement. "The footprint of an El Niño travels far beyond its origins in the Pacific Ocean, impacting agriculture, energy supplies, trade, water resources, supply chains, and livelihoods across entire regions."

How El Niño costs stack up

It's important to recognize that the trillions in losses are not mainly from immediate disaster damage. Mankin found in his research that these events are a persistent drag on economic growth after they occur.

The hazards from El Niño, like droughts, floods, heat waves, and wildfires, trigger immediate damages, but the lasting costs come from what they do to the foundations of growth, such as:

Agricultural losses that carry into later seasons

Interrupted labor

Interrupted schooling and childhood development, which surfaces in the workforce years later

Disruption to commodities markets and the transport sector

Investments that never happen because of the shock

Although each El Niño can bring different impacts, this World Meteorological Organization graphic shows some of the worldwide impacts that could occur later in 2026.How costly will this El Niño be?

"We know from observations that El Niños can cost the global economy trillions of dollars in damages and lost productivity," Mankin told USA TODAY. "These costs accrue over years and disproportionately impact countries whose weather and climate is most tied to El Niño."

"We know that past El Niños, like the 1997-98, cost the economy over $7 trillion by 2003."

Mankin said that the current El Niño will cost trillions of dollars globally, with more than $1.8 trillion of that in the U.S. alone by 2032.

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Because we don't know precisely how strong this El Niño is going to become, he said, we don't know how costly it will be.

El Nino arrives: Satellite image shows warmer-than-average sea-surface temperatures at the equator in the tropical Pacific Ocean (depicted using various shades of red and orange for warmth) during the first week of June 2026.Could this El Niño be the most expensive ever?

"In absolute dollar terms, yes, the current forecasts imply this could be the costliest El Niño on record," Mankin said. "The current forecasts have El Niño strengthening to over 2 degrees C (3.8 degrees F), which is a very strong event if it pans out."

At the same time, he said the event is impacting a larger global economy than the last El Niño, so there is more to be damaged. Both of these factors are why the 1997-98 event cost more than 1982-83 one. But while a stronger event raises the odds and probable scale of impact, the true total won't be known for years because the losses compound over time.

"In terms of its relative impact (for instance, as a percent of the current global economy), it will really depend on how strong the event ends up being."

Some specific impacts to watch -

Low rainfall is bad news for some crops: "El Nino is likely to have a negative impact ​on crop yields in Southeast Asia and India, where El Nino is typically associated with below-normal rainfall," said Kyle Tapley, enterprise sales executive at Vaisala Xweather's WeatherDesk. Meanwhile, Indonesian rice farmers are racing to get ahead of the usual planting schedule as they battle the ​threat of a ​lengthy dry spell ⁠this year. Malaysia's economic minister warned that El Niño could cause crop yields to fall by an average ​of 8% to 10% this year.

Fertilizer shortages are a worry: "A Super El Niño, combined with the current Middle East conflict and resulting fertilizer shortages, could have a multiplier effect on wheat, rice, and corn, which are already at risk due to reduced fertilizer availability during the planting season," said Saskia van Gendt, chief sustainability officer with Blue Yonder, a supply chain management company, in an e-mail to USA TODAY. "This will result in near-term shortages and price increases, along with a prolonged impact, since these crops are used as animal feed and in processed foods."

Flooding is also a concern in some areas: "During El Niño, increased rainfall is predicted to increase flooding, which may slow transportation and result in higher transportation costs," van Gendt said. "In other areas, El Niño may worsen droughts and restrict waterways. In 2023-2024, El Niño contributed to low water levels that limited passage through the Panama Canal."

There is some good news. Some areas actually see an agricultural boost from El Niño: "Some agricultural regions (eastern Brazil, Uruguay, Italy, Romania, and the Caspian Sea region) could see improved crop yields due to warmer temperatures and increased rainfall," according to van Gendt. "Historically, soybean crop yields have improved during El Niño events."

And experts say the negative effects of El Niño won't show up immediately. Van Gendt explains: "It usually takes several months for crop disruptions to translate into higher retail food prices, but consumers may experience earlier cost increases or combined cost increases due to fertilizer shortages. The World Economic Forum predicts that current fertilizer shortages will take six months to a year to affect food supply."

What is El Niño?

El Niño is a natural climate pattern where seawater in the central and eastern tropical Pacific Ocean is warmer than average. El Niño and its counterpart, La Niña, can influence storms and weather patterns around the world, including hurricanes.

El Niños occur on average about every three to five years and vary in strength, according to the National Oceanic and Atmospheric Administration.

Here in the United States, El Niños typically result in wetter, warmer winters for the West Coast and a milder hurricane season for the Atlantic seaboard.

Contributing: Reuters

Doyle Rice is a national correspondent for USA TODAY, with a focus on weather and climate.

This article originally appeared on USA TODAY: El Niño to have major, negative impact on economy. Here's why

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