An extreme El Niño event could inflict losses equivalent to at least 2 per cent of Latin America and the Caribbean's GDP and push an additional 4.8 million people into poverty, the Economic Commission for Latin America and the Caribbean (ECLAC) has warned in a report released on Monday. The Santiago-based agency says the risk is not hypothetical — projections by the US National Oceanic and Atmospheric Administration (NOAA) put a more than 90 per cent chance of El Niño reaching very strong intensity during the 2026–2027 boreal autumn and winter.

Scale of the Economic Threat

The ECLAC report, titled 'The Effects of El Niño in Latin America and the Caribbean and Recommendations for Addressing It', warns that a high-intensity event would have wide-ranging economic, social and productive impacts — particularly on energy, agriculture, fisheries and infrastructure. The largest economic losses would likely be concentrated in the first year of the event, though cascading effects could persist well beyond that.

ECLAC Executive Secretary José Manuel Salazar-Xirinachs cautioned of "severe economic and social repercussions" as well as damage to key productive sectors if the phenomenon reaches high intensity. Declining household incomes, the agency noted, could push poverty levels higher toward the end of the decade.

The Super El Niño Risk

According to NOAA projections, there is a 69 per cent chance that the current cycle reaches a historic 'Super El Niño' magnitude — a threshold that has historically triggered continent-scale disruptions in rainfall patterns, agricultural output and urban infrastructure. For the October–December 2026 window, the probability of below-normal rainfall across the region is estimated at 60 per cent, while 31.1 per cent of the region's territory is already under high alert.

Cities and Energy Systems at Risk

Higher temperatures are expected to drive up electricity demand for cooling in major urban centres including Lima, São Paulo and Mexico City — precisely at a time when reduced water availability threatens hydropower generation capacity. This combination raises the risk of supply disruptions and sharply higher operating costs across the region's energy grid. Latin America is heavily dependent on hydropower, making drought conditions a systemic risk rather than a localised one.

What ECLAC Is Recommending

The commission has urged governments across the region to take a range of pre-emptive actions: strengthening early-warning systems, protecting critical infrastructure, improving water management, diversifying energy sources, expanding climate insurance and social protection programmes, and deepening regional cooperation. ECLAC stressed that the cost of preparedness is considerably lower than the projected cost of unmitigated climate impact.

The warning comes as global attention on El Niño intensifies heading into the 2026–2027 cycle, with emerging economies across the Global South — including several in South and Southeast Asia — also on high alert for knock-on weather disruptions.