Overview
- Operational forecasts and independent model runs point strongly toward a very strong El Niño, with agencies and analysts tightening probabilities as of July 21, 2026.
- A Peterson Institute analysis applies historical teleconnection patterns to estimate about $686 billion in global losses in year one and up to $3.1 trillion over five years if investment declines compound.
- Deutsche Bank warns a very strong event would be a negative supply shock that raises food and energy prices and risks feeding higher consumer inflation given ongoing oil and shipping disruptions.
- The worst losses are expected in strongly teleconnected tropical lower‑ and middle‑income countries where crop failures, floods, hydropower shortfalls, infrastructure damage, and disease will hit households and public budgets hardest.
- Analysts urge immediate multilateral action such as pre‑approved concessional credit from development banks, streamlined IMF support, and scaled food and humanitarian pre‑positioning to limit avoidable multi‑year economic and food‑security harms.