September 2000 - Article - National accounts - note on the treatment of losses
J W Prinsloo
Last Modified Date:
2020-10-01, 09:31 PM
Quarterly Bulletins > Articles and Notes
Losses suffered on account of natural disasters caused by fires, droughts and floods are not explicitly accounted for in the national accounts. The cost of flood damage in Mpumalanga, the Northern Province and other regions since the beginning of 2000 and the severe damage earlier this year caused by wildfires in the Western Cape, nevertheless call for some quantitative assessment of the likely impact of these catastrophes on economic activity generally. To this end, the national accounts present a useful framework for deriving estimates of the extent of the damage caused by natural disasters.This note outlines how the consequences of a natural disaster are captured in the production and expenditure accounts. The treatment of capital stock and aid provided by general government are also briefly analysed. The final section contains a few graphs and some concluding remarks.