Extreme weathers in Queensland and NSW could rack up billions of losses.
By Ricky Roxas | December 28, 2010 11:13 PM EST
The downpours and flooding sweeping through the regions of Queensland and New South Wales would inevitably lead to losses that could cost the national economy some $7 billion, according to Australian economists.
Worst hit by the deluge would be the commodities frontliners such as the resources and the agricultural industries and AMP chief economist Shane Oliver is predicting that the weather disturbance's consequent damages on crop produces and delays in coal shipments could significantly reflect negative impacts on the gross domestic product (GDP).
Oliver expects the GDP to absorb an impact of up to 0.5 percent in the December quarter but the likelihood of spillover effects through the March quarter next year is not a remote possibility considering the wide expanse of the extreme weather condition, reportedly the worst in 50 years as far as Queensland is concerned.
AMP is convinced that the national economy is bound to incur a considerable impact though Oliver is optimistic that the two states mining activities would easily resume their normal operations once the weather improve.
He noted that the resources sector's main issue is transporting its coal produces to the ports for shipment "but that would ramp up fairly quickly as soon as the rail lines are back working again and the ports are fully operating."
However, the agricultural sector may find it hard to rebound in the same pace that that mining industry is expected to pick up, according to rural advocacy group Agforce.
Agforce's Ian Burnett is predicting that recovery in the sector would be much difficult if not slower as he cited that "we've got some areas that have had two or three events in the last two years so there's a real cumulative effect."
Burnett added that livestock, cotton, wheat and chickpea crops in both agricultural regions of Queensland and NSW bore the heaviest brunt of the heavy rains and flooding and could require more time and possibly government intervention to return operating on two feet again.
