Assessing the global economic impacts of floods and their potential propagation through international trade

With globally interconnected economies through supply chains, the economic impacts of flooding—one of the most devastating natural disasters—pose significant concerns for both direct flood-affected countries and their trade partners. This underscores the need for a global assessment of these direct economic impacts and their potential propagation to develop flood-resilient supply chains on a global scale. Here, to assess the generic global flood risks, we evaluate direct economic losses across different sectors and propose indicators for assessing the indirect impacts of flood propagation through international trade. We demonstrate that the estimated global annual economic loss across agricultural, industrial, and service sectors is US$194 billion. China, India, the USA, Indonesia, and Egypt are significant sources of flood-related risks due to their considerable direct economic losses and diverse export partners, collectively accounting for more than 50% of the global direct economic loss. Meanwhile, emerging and developing countries in Asia and Africa and some developed countries with concentrated imports from high-risk-giving countries show significant potential to be affected by flood impacts indirectly; the relevance of indirect risk to these countries differs from the sector. These findings highlight the importance of a sector-wise assessment of flood economic impacts and their potential propagation via trade. Therefore, the assessment methods and indicators developed in this work will help inform policy and investment decisions for building flood-resilient supply chains and supporting business continuity plans.