An Analysis between Flood Damage and Economic Growth in Bangladesh Amid Changing Precipitation Dynamics

Abstract

Precipitation indices over recent years indicate an upward trend in rainfall for all over the Bangladesh. As, Bangladesh is an extremely riverine country, the increased rain and flood caused enormous loss for the last few decades. However, with improved infrastructure and climate resiliency, the damage caused by these events has seen a relative decline. To understand the economic impact of precipitation and flood-related damages, this study explores the relationship between damage due to flood and rain and Bangladesh’s GDP. Utilizing data from the World Development Indicators (WDI), the World Bank, and the Government of Bangladesh’s Delta Plan 2100, a regression analysis was conducted to evaluate the correlation between flood-induced damage and GDP. The results show a non-significant negative correlation, indicating that while economic growth may mitigate the proportionate financial losses from flooding, the statistical relationship remains weak. This lack of significance is likely attributed to Bangladesh’s high exposure to cyclones and extreme weather events, which introduces variability in the damage estimates and results in a non-linear damage-GDP relationship. These findings suggest that annual damages are inconsistent, with no clear trend due to the irregular occurrence of cyclones. This study highlights the importance of improving disaster preparedness and climate resilience strategies, particularly in cyclone-prone areas. Additionally, it underscores the need for more sophisticated statistical models that can better account for the complexities of disaster-related economic losses. Future research should focus on incorporating these factors to provide a more comprehensive understanding of the financial impacts of climate change in Bangladesh.