Deadly floods’ $26 billion toll shows Asia’s rising climate risk
Sign up now: Get ST's newsletters delivered to your inbox
In Indonesia, Cyclone Senyar killed at least 700 people and triggered flooding and landslides in Sumatra, a major producer of coal, coffee and palm oil.
PHOTO: AFP
Follow topic:
JAKARTA – Devastating floods have killed more than 1,300 people and caused at least US$20 billion (S$26 billion) in losses since late November across parts of South and South-east Asia, underscoring the increasing risks from climate change and extreme weather for the region’s fast-growing populations and economies.
A sequence of three tropical cyclones coincided with the regular north-east monsoon to deliver rainfall totals unseen in decades in some locations, and triggered a wave of destruction from Sri Lanka to Indonesia – damaged homes, roads and rail lines, decimated crops, slowed factory output and inundated tourist spots.
Scientists and analysts have pointed to the likely aggravating impact of climate change on the flooding, along with exacerbating factors including deforestation, failures in flood defences and a lack of funding for disaster resilience.
“Climate change is undeniably fuelling more severe flooding in South-east Asia,” said Dr Davide Faranda, research director in climate physics at the French National Center for Scientific Research who led a study on Vietnam’s November floods.
The risk in South-east Asia is that “compound disasters” – when multiple extreme events strike in close succession – will occur more frequently and inflict greater damage in the coming years, according to research firm BMI, a unit of Fitch Solutions.
The region also has some of the largest shares of people living in areas at risk of floods: 21 per cent in Malaysia, roughly 20 per cent in Indonesia and around 15 per cent in Singapore, Vietnam, the Philippines and Sri Lanka, BMI analysts wrote in a note this week.
That proportion is higher than in the mid-to-late 2010s, and “will continue to rise as global warming accelerates and populations in vulnerable areas grow”, they wrote.
Countries in South-east Asia consistently rank among the most at risk, with the Philippines, Myanmar and Vietnam among the 10 nations most affected by climate change in 2024, according to Germanwatch, an independent human rights organisation.
Despite those risks, progress toward building climate resiliency in many countries lags other parts of the world partly because some authorities in South-east Asia prioritised growth over planning and adaptation efforts, said Dr Helen Nguyen, an environmental engineering professor with University of Illinois Urbana-Champaign.
“The development went so fast,” said Dr Nguyen. “That came at the expense of the environment.”
That intersection of politics and failed efforts on climate adaptation is most acute in the Philippines, where populist anger is rising over a multibillion corruption scandal involving government funds for flood mitigation projects.
The scandal triggered a pause on infrastructure projects, dented investor confidence, and caused economic growth to tank to its lowest level in four years.
While the impact so far on industrial output from 2025’s storms has been limited, the overall damage is still unclear.
The US$20 billion total for November alone is based on government and analyst estimates, which will likely be revised as total damage is assessed. In 2024, seasonal floods caused an estimated US$25 billion in economic losses across the Asia-Pacific, according to a study by insurance broker Aon.
Despite the wide regional impact, “the region’s main commercial and industrial centres appear largely unscathed”, analysts at Capital Economics wrote in a research note on Dec 3, comparing the damage to the 2011 Thailand floods that hit the industrial areas around Bangkok and caused a double-digit gross domestic product (GDP) decline.
The hit to supply chains and manufacturing “is likely to be small and temporary”, though risks remain that crop losses will push up food prices, the analysts wrote. Coffee producers in Vietnam remain on track for higher production and exports, despite delays to the harvest caused by the widespread flooding.
Still, disaster response and the recovery effort will come at a significant cost for nations like Thailand and Indonesia, which have been struggling to stimulate their domestic economies without blowing out their budgets, and for Sri Lanka that has been recovering since a 2022 default.
“While the region is accustomed to severe weather disruptions, these have increased in scale and frequency in recent years,” said Dr Frederic Neumann, chief Asia economist at HSBC Holdings.
“More and more fiscal outlays need to be diverted to harden infrastructure and build up resilience. Especially for poorer economies, this can entail difficult choices that require reductions in badly needed expenditures elsewhere,” he said.
Cyclone Ditwah in Sri Lanka, which has killed at least 465 people, could cost the economy as much as 500 billion Sri Lankan rupees (S$2.1 billion), according to Mr Udeeshan Jonas, chief strategist at CAL, a Colombo-based investment banking group. “This includes an estimated loss of output of 1 per cent of GDP and physical damage,” he said.
In Southern Thailand, Cyclone Senyar has inflicted some of the worst flooding on record, paralysing a key technology and tourism hub and racking up damage of more than US$15 billion so far.
With the flow of high-value exports such as electronics components and auto parts practically paralysed, the country may face additional losses of up to US$400 million a month if conditions persist, Thailand’s Commerce Ministry said. Tourist arrivals will also likely be completely wiped out in the immediate aftermath of the floods, according to the University of the Thai Chamber of Commerce.
In neighbouring Indonesia, the storm has killed at least 700 people and triggered flooding and landslides in Sumatra, a major producer of coal, coffee and palm oil.
Jakarta-based think tank Center of Economic and Law Studies estimates losses of over US$4 billion or 0.29 per cent of GDP, due to damage to roads and bridges, and the loss of household incomes and agricultural output.
Even prior to the November storms, Thailand and Indonesia both rolled out billions of dollars of stimulus to spur economic growth, lifting risks of straining state finances. Both nations have been battling weakening consumption and a tougher export environment from the US tariffs.
The pressure is also felt in Vietnam, which has been relatively more resilient to the trade war fallout and has become one of the region’s fastest-growing economies. Severe storms in November slowed manufacturing growth, with firms reporting delayed deliveries and faster inflation, which pushed them to raise selling prices.
Storm damage alone
