(Bloomberg) — The United States and the Philippines are the countries hit hardest by climate-driven extreme weather, measured as a percentage of their economies, according to a report released Wednesday by global reinsurance giant Swiss Re.
The US currently experiences the worst losses in absolute terms: about $97 billion annually, due to its disproportionate share of insured assets. That amounts to almost 0.4% of gross domestic product, or GDP. The hit to the Philippines is much smaller in dollars at $12 billion, but represents a 3% share of the nation’s GDP.
Swiss Re Institute, the group’s research arm, looked at how four major weather perils — floods, hurricanes, winter storms and severe thunderstorms — inflict economic damage on 36 countries. Annual losses from just these perils amount to about $200 billion globally, averaged over the last 10 years.
The institute then analyzed the losses as a percentage of GDP, which gives a different lens on the financial pain caused by such events. “It is easier to have a debate around the benefits of climate adaptation when you see the risks as real economic costs to countries,” said Jérôme Jean Haegeli, Swiss Re’s group chief economist.
The countries that suffer the third and fourth most losses, proportional to GDP, are Thailand and Austria. China ranks fifth and Japan 10th. Ireland, Israel and Turkey are at the bottom of the list of 36.
The report considers how this will play out into the future. Researchers used predictions from the UN’s Intergovernmental Panel on Climate Change for hazard intensification based on a “middle of the road” emissions scenario. They overlaid these on the current geographical pattern of losses to predict where future damage is most likely to occur.
Climate change won’t exacerbate risk to the same degree in every country. As the report notes, China and India today both experience significant weather-related losses. “However, the probability of hazard intensification in China is more than in India. The inference is that in the future, China may be exposed to potentially higher weather related losses as a percent of GDP than India,” the authors write.
Poland and the Czech Republic will be at highest risk of increasing damages through 2050, the researchers found, with more property there exposed to climate-related flooding.
There are two human factors that the analysis cannot predict. First, whether people continue to build in high-risk coastal areas. In the US, for example, people continue to move to very exposed areas like the coasts of Florida.
The other unknown is how much money is spent on adaptation measures, like building seawalls and fortifying infrastructure. The insurance industry has become a big advocate of this as a way to limit damages and therefore the skyrocketing premium costs that customers are increasingly complaining about.
But that takes money, so it is happening slowly, especially in the countries that need it most.
Gaia Larsen, director of climate finance access at the World Resources Institute, a Washington-based research organization, said that most climate investments are for mitigation (that is, reducing emissions) “while we really need to shift to adaptation.” That need is most pronounced “in developing countries, where they are seeing the biggest impacts relative to GDP and have the least resources to build back after natural catastrophes,” she said.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
