IMPACT OF NATURAL DISASTERS ON ECONOMIC GROWTH

Abstract

Natural disasters such as earthquakes, floods, hurricanes, droughts, and wildfires have become increasingly frequent and severe in recent decades. These events pose significant challenges to economic systems, particularly in developing countries. This paper examines the relationship between natural disasters and economic growth through theoretical analysis and empirical evidence. The study finds that natural disasters generally have a negative impact on economic growth by destroying physical and human capital, disrupting production, and increasing fiscal pressures. While some theoretical perspectives suggest potential positive effects through reconstruction and technological upgrading, empirical evidence indicates that such benefits are limited and context-specific. The adverse effects are particularly pronounced in low-income countries with weak institutional frameworks. The paper concludes by emphasizing the importance of disaster risk reduction, resilient infrastructure, and effective policy interventions to mitigate economic losses and promote sustainable growth.