By Alexander Lee

The aftermath of Hurricane Ida is expected to affect the energy, chemical, and shipping industries in the Gulf Coast region. However, economists believe the overall impact on the U.S. economy should be modest, provided damage estimates do not increase significantly and refinery shutdowns are not extended.

Mark Zandi, chief economist at Moody's Analytics, anticipates the disruptions from Ida will prompt him to slightly lower his forecast for U.S. economic growth for the July-September quarter. However, he also suggests that any economic loss could be recuperated in the final quarter of the year due to rebuilding efforts post-hurricane.

Zandi predicts the nation's gross domestic product (GDP) will grow at a 6.5% annual rate in the second half of this year, in line with the average growth rate of the first six months. Nonetheless, he cautions that the Delta variant of the coronavirus could pose additional risks to the economy depending on its impact on consumer spending.

Zandi emphasizes that the primary channel through which Ida could affect the broader economy is energy prices. He states, "We will have to see how much damage occurred to production in the Gulf and how long that production will stay offline."

Zandi speculates that gasoline prices might experience a temporary increase, but anticipates that any surge in pump prices would only last a few weeks. In the worst-case scenario, he suggests that Ida could add 10 to 20 cents to the price of a gallon of gas through September.

Brian Bethune, an economist at Boston College, agrees with Zandi's assessment regarding the potential jump in gasoline prices. However, he notes that the extent of the price increase will depend on the duration of the production shutdowns and the availability of alternative supplies in other regions.

Government statistics reveal that approximately 95% of oil and gas production in the Gulf Coast was halted as Ida made landfall. The Colonial Pipeline also temporarily suspended some of its gas lines as a precautionary measure. Analysts from S&P Global Platts report that nearly 4.4 million barrels per day of refinery capacity, predominantly in Louisiana, were offline before Hurricane Ida struck the region on Sunday afternoon.

Reporter Alexander Lee alexanderlee_24@newsyn.co.kr