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Superstorm Sandy may slow U.S. economy slightly in the fourth quarter

(Xinhua)

08:26, October 31, 2012

WASHINGTON, Oct. 30 (Xinhua) -- Superstorm Sandy would cause about 20 billion U.S. dollars in property damages and would trigger a slight reduction in U.S. economic growth in the fourth quarter, according to IHS Global Insight, a forecasting company.

In a preliminary evaluation, the firm said damages from storm Sandy could reach 20 billion dollars, with around 10 billion dollars insured, and that would put Sandy on par with last year's Hurricane Irene in terms of total infrastructure damage estimated around 15 billion dollars.

However, combining all of the disruptions, there would be additional 10 billion to 20 billion dollars in lost business activity, it added.

"The effect on growth for the fourth quarter will not be catastrophic but might still be noticeable, especially in an economy with little momentum anyway," the firm noted, saying the lost output in the affected regions would subtract as much as 0.6 percentage points from the economic growth in the fourth quarter.

Sandy, which made landfall in New Jersey Monday evening and combined with winter storms to become a hybrid storm, has impacted 15 states. Millions of homes suffered power outage and 70 percent of East Coast oil refineries were shut down, according to media reports.

Mark Zandi, chief economist of Moody's Analytics, said economic growth lost to the storm can likely be restored once reconstruction begins. If the storm simply disrupts things for a few days and doesn't do significant damage to infrastructure, it will not have a significant national impact, he added.

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