After a $3.5 billion hit, natural disasters to weigh on Australia's economy

One of the key risks weighing on the Australian economy in 2023 would be natural disasters, said Treasurer Jim Chalmers, according to Bloomberg.

Inflation was fueled by flooding, which cost the Australian economy over $ 3.5 billion, or a quarter of a per cent of the gross domestic product (GDP) in the fiscal year 2021–2022.

Before visiting the state of New South Wales to assess the reconstruction efforts in the wake of the disastrous floods in 2022, Chalmers released that government analysis.

Add WION as a Preferred Source

He warned that the economy hadn't yet fully recovered from the previous year's floods and that the May budget would include a section on Australia's disaster readiness.

Also Read |Australia's economy slows ahead of election

"In Australia, we're always conscious that natural disasters have the ability to throw us off course, and we expect this uncertainty to be one of the key factors weighing on our economy in 2023," Chalmers told Bloomberg.

According to the Treasury analysis, flooding contributed to a more than 16 per cent increase in fruit and vegetable costs in the year to September, and prices were predicted to rise further.

Watch |World Business Watch: Australia's economy rebounds sharply in Q3, growth beats forecast

According to data from the National Emergency Agency, 68 per cent of the Australian population resided in a region affected by a natural disaster last year.

A tropical cyclone-induced flood that occurred last week in Western Australia's remote northwest Kimberley Region isolated numerous rural communities and caused damage to homes and infrastructure.

(With inputs from agencies)

WATCH WION LIVE HERE: