Multiple hazards and economic resilience: Sectoral impacts and post-disaster recovery in a high-risk Brazilian State

Abstract

Rio Grande do Sul accounts for 22% of Brazil’s losses from extreme events, mainly droughts and floods. The state had the second-worst economic performance in the country between 2000 and 2022. This study quantifies the impacts of major events such as droughts, floods, and the COVID-19 pandemic on economic sectors. Three methods were applied: structural breaks, recovery time, and sector-specific loss estimates. The analysis covers 15,365,123 observations of monthly invoice values from January 2017 to April 2025, involving 357,001 companies paying value-added tax on consumption. The results indicate that negative structural breaks occurred in a few sectors, which account for 5% of the state’s economy. The recovery time followed a similar trajectory between droughts and COVID-19. On average, sectors took 12 months to recover from COVID-19, compared with about 6 months for natural hazards. The sectors most impacted were travel, artistic activities, machinery and equipment industry, accommodation, and domestic services. Aggregated loss estimates were highest during the COVID-19 pandemic (−8%), followed by floods (−1%) and droughts (0%). The results indicate remarkable overall short-run economic resilience. Furthermore, sectors such as information technology, consulting, business services, and healthcare performed exceptionally well.