CARIBBEAN-ECLAC warns extreme El Niño could undermine economic growth in Latin America and the Caribbean.

SANTIAGO, Chile, CMC – The Economic Commission for Latin America and the Caribbean (ECLAC) warns of serious economic and social repercussions, as well as impacts on various productive sectors, from the ongoing El Niño.

It said the event could cause a two per cent Loss in regional gross domestic product (GDP) over three years and push 4.8 million more people into poverty in Latin America and the Caribbean toward the end of the decade, compared with a scenario without El Niño.

In a special report titled “The Effects of the El Niño Phenomenon in Latin America and the Caribbean and Recommendations for Addressing It,” ECLAC warns of a phenomenon of historic magnitude and the economic consequences.

It said that the United States National Oceanic and Atmospheric Administration’s (NOAA) projections indicate a more than 90 percent probability that El Niño will reach a very high intensity during the northern hemisphere’s fall and winter 2026-2027 and a six percent probability of the phenomenon reaching historic magnitude (“Super El Niño”), with anomalies in ocean surface temperatures greater than +2.5°C or +3.0°C in the region.

ECLAC highlights that this phenomenon is occurring in a context where anthropogenic climate change amplifies natural variability, with an average global temperature of 1.55ºC above preindustrial levels recorded in 2024.

“The economic impacts will be deeply heterogeneous and persistent: contraction of real GDP, inflationary pressures, poverty, and critical vulnerability in key sectors, such as energy, fishing, agriculture, and some infrastructure.”

According to the report, the region has greater structural vulnerability in the energy sector, as in several countries hydroelectric generation makes up more than 70 percent of the electric grid and more than 50 percent of installed capacity is over 30 years old.

DCLAC said that by the 2026 October-December trimester, the probability of a precipitation deficit climbs to 60 percent, with 31.1 percent of the regional territory on high alert. High temperatures will sharply increase electricity demand for climate control in large cities when less water is available, increasing the risk of power failures and operational cost overruns.

Fishing and marine resources are also expected to be severely affected. These include weakened upwelling of cold water in the Pacific, which reduces phytoplankton availability, alters the trophic network, and causes key species like anchovies, sardines, and hake to sink or migrate.

ECLAC said that during previous Super El Niño events, regional fishery catch dropped by 52.7 percent (1972-1973) and 26.9 percent (1997-1998), alongside the proliferation of harmful algal blooms (red tide) and mass coral reef bleaching across the region.

The report also warns of danger to the agricultural sector and food security and that, based on the Food and Agriculture Organization’s (FAO) analysis, there is over a 70 percent probability of droughts that will affect the agricultural sector in the coming months in the Dry Corridor of Central America, Colombia, Venezuela, and Caribbean countries such as Cuba, the Dominican Republic, and Haiti, threatening staple crops, feed availability, and rural incomes.

ECLAC said that to keep climate impacts from becoming prolonged socioeconomic crises, it is urging governments to adopt 10 strategic public policy measures, including planning with the prospect of climate change, resilient infrastructure and early alerts, incidental financial mechanisms, and climate insurance: Maintaining reserve funds, catastrophe bonds, and insurance to provide immediate liquidity, as well as resilience in production chains and settlements.

It also recommends regional cooperation and energy integration, diversification of the electric grid, comprehensive watershed-based water management, focused social protection networks, and energy efficiency and management of urban demand.

“Responses adopted once the emergency has been declared are considerably more expensive than preventive measures based on adequate anticipation. We must shift from a response after losses to anticipatory management of climate risk,” said ECLAC’s executive secretary, José Manuel Salazar-Xirinachs.