Urban economic resilience after climate disasters: A regional recovery forecasting framework for the Valencia floods

Priscila Espinosa (), Priscila Espinosa, Maria Teresa Balaguer-Coll (), José Manuel Pavía () and Emili Tortosa-Ausina
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Priscila Espinosa: Department of Applied Economics, Universitat de València, Spain
Maria Teresa Balaguer-Coll: Department of Finance and Accounting, Universitat Jaume I, Castellón, Spain
José Manuel Pavía: Department of Applied Economics, Universitat de València, Valencia, Spain

No 2025/10, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: The floods that struck the Valencian region (Spain) in October 2024 illustrate how climate change is intensifying extreme weather events in Mediterranean floodprone areas, challenging regional economic resilience. This disaster, which resulted in numerous fatalities and extensive infrastructure damage, disrupted supply chains across a region already vulnerable due to decades of urban and industrial development in the area. Drawing on regional economic resilience theory and recovery curve methodologies, we present an ex ante framework for rapidly assessing climate disaster impacts on regional economic growth. Our approach combines sectoral recovery dynamics with worker-level impact data to update GDP growth forecasts in real-time, addressing a critical gap in disaster response capabilities for increasingly climate-vulnerable regions. Applied to the Valencia floods, our methodology reveals differential sectoral resilience patterns: while construction demonstrates rapid recovery due to reconstruction demand, agriculture shows prolonged vulnerability reflecting the sector’s exposure to climate risks. Compared to pre-flood forecasts, results indicate economic contractions of up to 0.2 percentage points in 2024 and 2025, followed by a policy-supported rebound adding 0.3 percentage points to growth in 2026. The analysis underscores how government intervention fundamentally shapes postdisaster economic trajectories in flood-prone regions. Beyond providing immediate impact assessment, this framework offers a generalisable tool for enhancing climate resilience planning in Mediterranean and other climatevulnerable territories, enabling policymakers to rapidly adjust economic forecasts and recovery strategies as extreme weather events become more frequent and severe under climate change.

Keywords: macroeconomic forecasting; GDP growth; natural disasters; recovery curves; regional economic resilience (search for similar items in EconPapers)
JEL-codes: C53 H84 Q54 R11 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2025
New Economics Papers: this item is included in nep-env, nep-for, nep-geo and nep-ure
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