Moody’s RMS, the global risk modeling and solutions company, has projected economic losses from the Maui wildfires to be between $4 and $6 billion.
The fires, which began on August 8, have tragically taken the lives of at least 115 individuals and caused devastating damage to property, infrastructure and homes.
According to Moody’s estimation, the economic loss is based on property damage, content destruction and disruptions to businesses — spanning residential, commercial, industrial, automobile and infrastructure assets.
Destroyed buildings and cars are seen in the aftermath of the Maui wildfires in Lahaina, western Maui, Hawaii on August 17, 2023. Yuki Iwamura | AFP | Getty Images.
However, the economic loss projection doesn’t encompass broader macroeconomic influences, which could include the anticipated decline in the island’s Gross Domestic Product (GDP), government disbursements or supplementary social expenses resulting from the wildfires.
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“Post-event loss amplification is expected to be high in this event due to the island effect on supply chains, high construction labor costs in general, inflationary impacts during the expected long recovery time, and potential ordinance and law requirements,” Rajkiran Vojjala, vice president of model development at Moody’s, said in a statement.
The most pronounced losses are estimated to be in Lahaina, where the fires blazed through 2,100 acres of land and led to the destruction of nearly 2,200 structures in just 12 hours, according to Moody’s. Local officials have also said that nearly 80% of Lahaina structures have been destroyed, per The Los Angeles Times.
Moody’s determined the estimation by using satellite and aerial imagery of the most heavily affected regions and damage maps sourced from the Maui Emergency Management Agency.
Following the fires, Maui’s travel advisory board has cautioned visitors to avoid the west area of the island where the majority of the devastation took place, but Hawaiʻi governor Josh Green urged tourists to visit elsewhere, as the support will be vital to restoring the island’s economy.
“No one can travel to West Maui right now. We will share when that is possible again. Only returning residents and authorized emergency relief workers should come here now. But all of the other areas of Maui… and the rest of Hawaiʻi are safe,” Green said in a statement. “When you come, you will support our local economy and help speed the recovery of the people that are suffering right now.”
Tourism is vital to Maui’s economy, accounting for 80% of its revenue, according to the island’s economic development board, per Reuters.
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