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Irene’s damages could exceed $20bn

International

First estimates of physical damages caused by hurricane/tropical storm Irene ranged from 7 to 20 billion dollars as of Sunday.

And if one calculates in the loss of economic activity for at least two days, if not more, through the coming week, losses could reach as high as 45 billion dollars, said Peter Morici, an economist and professor at the University of Maryland.

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The 7-billion-dollar estimate comes from the Consumer Federation of America, which said in a statement that payments for wind damage from Hurricane irene could exceed 5 billion dollars. Flood claims will likely be less, about 2 billion dollars, since so few people along the East Coast have purchased flood insurance.

That doesn't mean that flood losses won't be greater than 2 billion dollars. Irene dumped heavy rain starting early Saturday in North Carolina, and was still pumping moisture onto Vermont, New Hampshire and Massachussets.

In North Carolina, Hatteras Island had been totally inundated by wind-whipped sea water, which carved a new channel across a connecting road and set homes on fire.

Dam breasts have broken and rivers have left their banks, including New York City's Hudson and East Rivers.

Morici estimated physical damages at 20 billion dollars, but said an added 25 billion dollars will likely result from economic losses. Major cities along the East Coast - which represents about 25 per cent of the economy, Morici says - shut down all activity starting as early as Friday: Washington, Balitmore, Philadelphia, New York.

The Washington transit system said it had 67 per cent fewer riders on Saturday than on a normal Saturday. Philadelphia closed its transit system on Saturday, as did Boston on Sunday. Airports were only slowly gearing up operations on Sunday.

New York's transit system remained closed Sunday even though the storm had passed, as crews were inspecting subway tracks for safety, the MTA said Sunday. New Yorkers were wondering how they will get to work on Monday.

But Morici was optimistic that the long-term costs spread over two years will be lessened by the likelihood that people and businesses that need to rebuild will use the opportunity to build larger.

In addition, the post-Irene rebuilding will be a boon to an area of the economy now plagued by high unemployment - the construction industry -Morici said. - Sapa-dpa

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