This working paper documents a cross-country study assessing the impact of natural disasters on growth in the Pacific islands as a group.

A panel panel vector autoregression (VAR) analysis suggests that, for damage and losses equivalent to 1 per cent of GDP, growth drops by 0.7 percentage point in the year of the disaster. The study also finds that during 1980-2014, trend growth was 0.7 percentage point lower than it would have been without natural disasters.

The paper also discusses a multi-pillar framework to enhance resilience to natural disasters at the national, regional, and multilateral levels and the importance of enhancing countries’ risk-management capacities. It highlights how this approach can provide a more strategic and less ad hoc framework for strengthening both ex-ante and ex-post resilience and what role the International Monetary Fund can play.

[Adapted from source]