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WASHINGTON — Hurricane Ida is sure to take a toll on the energy, chemical and shipping industries that have major hubs along the Gulf Coast, but the impact on the overall U.S. economy should be modest so long as damage estimates don't rise sharply and refinery shutdowns are not prolonged, economists suggested Sunday.
Mark Zandi, chief economist at Moody’s Analytics, said the disruptions caused by Ida will likely lead him to downgrade his forecast for annual U.S. economic growth in the current July-September quarter by a few tenths of a percentage point. But that economic loss, he said, could be reversed in the final quarter of the year as a result of the rebuilding from the hurricane's damage that will likely follow.
Zandi said he expects the nation’s gross domestic product — its total output of goods and services — to grow at a 6.5% annual rate in the second half of this year, matching the average growth of the first six months. Still, besides the impact of Ida, Zandi noted that the highly contagious delta variant of the coronavirus poses risks to the economic outlook, depending on how much it leads Americans to slow their spending on travel, restaurant meals or other forms of spending.
HURRICANE IDA BRINGS 'NIGHTMARE SCENARIO' FOR GAS PRICES
"The key channel for Ida to impact the broader economy is through energy prices," Zandi said. "We will have to see how much damage occurred to production in the Gulf and how long that production will stay offline."
A brief spike in gasoline prices could result, Zandi said, because of the production shutdowns. But he suggested that the increase in pump prices might last for only a few weeks.