Natural Hazards and Economic Resilience: Sectoral Impacts and Post-Disaster Recovery in a High-Risk Brazilian State

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 like 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 have occurred in a few sectors, accounting for 5% of the state's economy. The recovery time followed a similar trajectory between droughts and Covid-19. The average recovery time for sectors was 12 months for Covid-19, while it was close to 6 months for other events. The sectors most impacted were travel, artistic activities, machinery and equipment industry, accommodation and domestic services. As for aggregated loss estimates, they were most relevant during the Covid-19 event, with -8%, followed by floods with -1%, and droughts with 0%. The results indicate remarkable overall economic resilience. Furthermore, sectors such as information technology, consulting, business services, and healthcare performed exceptionally well.