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Significance
An El Nino system usually leads to lower rainfall and higher daytime temperatures, often causing severe droughts which last for months and can reduce agricultural output. Australia last experienced an El Nino event in 2016.
Impacts
GDP growth could decline by 0.3-0.5% if there is an extended El Nino event, but some industries will benefit from the drier conditions.
Related cost increases will put more pressure on businesses as they struggle to return to pre-pandemic levels of activity.
Interest rates may need to rise further to contain inflation, adding to the repayment burden of mortgage holders.
Keywords:
Australia,
AP,
economy,
industry,
agriculture,
energy,
food,
foreign trade,
natural resources,
prices,
utilities,
water,
climate,
Food & Tobacco
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2023
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