The 2026/27 El Niño and risks to global growth

Summary

El Niño is a recurring climate phenomenon, but the ongoing 2026/27 event may warrant particular attention. Forecasts suggest it could become very strong, potentially ranking among the strongest on record. This Policy Brief assesses what such a strong El Niño could mean for global growth. Building on existing empirical estimates, our calculations point to a significant downside risk, with substantial differences across countries. Effects for the euro area are comparatively limited. The numbers illustrate the potential scale of the risk.

Highlights

Highlight 1
Growth effects vary widely across countries
Countries differ considerably in how strongly their weather responds to El Niño, implying large differences in potential economic effects

Highlight 2
Meaningful downside risk to global growth
Our calculations imply potential output losses of around 0.4–0.7% of global GDP, with larger effects in countries where weather conditions respond more strongly to El Niño

Highlight 3
El Niño as an external risk to the euro area
Calculated growth effects are comparatively limited, but a very strong El Niño can affect the euro area through broader global spillovers and therefore warrants close monitoring