Brace for El Niño Asia Chart of the Week

Research evidence excerpt

Brace for El Niño Asia Chart of the Week

19 June 2026

Economics

Asia Asia Chart of the Week

Brace for El Niño

Well, it has begun. El Niño, the periodic global weather phenomenon associated

with warming surface temperatures in the southern Pacific, kicked of this month

according to scientists (NOAA, 11 June). This could pose threats to economies in

Asia later this year potentially exceeding the impact of the energy price shock so

far. Two risks loom. First, this year could see an especially severe El Niño: surface

temperature are currently 0.9 degrees above normal, still mild, but these could rise

above 2 degrees, which constitutes a ‘very strong’ event, with some forecasters

even pencilling in a rise over 3 degrees by December, which would make this the

strongest such event on record (New York Times, 11 June). Second, the current El

Niño comes at a time of already precarious conditions: because of the Middle Frederic Neumann

East conflict, farmers across Asia face much higher fertilizer and energy costs, Chief Asia Economist, Co-head Global Research Asia

The Hongkong and Shanghai Banking Corporation Limited

which could further amplify pressures on agricultural conditions. Moreover, energy fredericneumann@hsbc.com.hk

demand could spike due to rising temperatures and the disruption to hydro-power +852 2822 4556

generation, hurting growth more broadly. The total economic effects are hard to Nneka Chike-Obi

Director, Sustainability Research

predict, but global losses during previous El Niños reached trillions of US dollars, The Hongkong and Shanghai Banking Corporation Limited

with per capita income losses amounting to 5.8% over five years on average in nneka.chike-obi@hsbc.com.hk

+852 2284 1241

Asia during a strong episode in 1982-83 and 4.6% during one in 1997-98. South