The catastrophic floods that claimed 227 lives in Spain last month could reduce the country's economic growth by 0.2% in the final quarter of 2024.
This was announced by central bank governor Jose Luis Escriva, AFP reports.
Spain's economy grew faster than the eurozone average this year after recovering from the Kovid crisis.
But the October 29 crash blew away roads and railways, submerged fields and destroyed homes and businesses in the EU's fourth-largest economy.
The floods reportedly caused tens of billions of euros in damage.
"The estimated impact on the quarterly growth rate in the fourth quarter will be close to -0.2%," Escriva said.
He added that the assessment was based on what happened after Hurricane Katrina, which devastated the US Gulf Coast in 2005, killing more than 1,800 people.
While the devastation after the floods did not reach the "levels" seen after Katrina, "the dynamics are very similar," the central bank governor said.
The disaster caused the most damage and the most deaths in the eastern region of Valencia, which is one of Spain's industrial and manufacturing centres. One of the busiest cargo ports is located in the area.
Some of the hardest hit areas were residential towns in the industrial area around Valencia. The city is the third largest in the country. Eskriva says it has disrupted economic activity there.
Spain's economy expanded 0.8% in the third quarter thanks to rising exports and domestic consumption, beating central bank forecasts.
In September, the government changed its GDP growth forecast for 2024 from 2.4% to 2.7%. So far, it has not changed its forecast following the floods.
Observers, including the IMF, have also revised up the country's growth outlook. Credit rating agency Fitch forecasts around 3% in 2024 and above 2% in the next two years. | BGNES
