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THE ECONOMIC IMPACT

OF TERRORISM

FIGURE 1.6
The economic impact of terrorism, US$ billion, 2000–2017
The global economic impact of terrorism peaked in 2014 and has since declined in line with the decline of terror-related
deaths committed by ISIL.
120

100 108
CONSTANT 2017 US$, BILLIONS

91 89
80

75
60

65 September 11 attacks 52
48
40
43

32 33
20 27 27 28
20 20
13
9 11 10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: IEP

The global economic impact of terrorism was US$52 billion in TABLE 1.2
2017, a 42 per cent decline from 2016. This is the third The ten worst affected countries by
consecutive year of decline in the cost of terrorism from its peak
economic impact of terrorism as percentage
in 2014 of US$108 billion. The economic impact in 2017 was less
of GDP, 2017
than half the impact seen in 2014.
The countries with the highest economic impacts of terrorism
Figure 1.6 shows the economic impact of terrorism from 2000 to are all suffering from ongoing conflict.
2017 in billions of US dollars. The impact of the September 11
terrorist attacks in 2001 is shaded separately.
Country % of GDP

Countries suffering from armed conflict experience a


Afghanistan 12.8%
significantly higher economic impact from terrorism.
Iraq 10.8%
Afghanistan is the country most affected by the economic
impact of terrorism as a percentage of GDP at 12.8 per cent. Syria 5.8%
Afghanistan has experienced a consistent increase in the level of
Somalia 5.0%
violence from terrorism and ongoing conflict over the past three
years. Iraq is the only other country that experienced costs of South Sudan 3.9%
terrorism greater than ten per cent of its total economic activity,
Central African Republic 3.6%
with the economic impact of terrorism equivalent to 10.8 per
cent of Iraqi GDP. Table 1.2 shows the ten countries with the Nigeria 2.6%

highest economic impact from terrorism as a percentage of their Libya 1.8%


GDP in 2017.
Egypt 0.8%

The economic impact of terrorism model includes costs from Yemen 0.7%
deaths, injuries and property destruction. The model also
Source: START GTD, IEP Calculations
includes losses in economic activity, where terrorism causes
more than 1,000 deaths.

Deaths from terrorism accounted for 72 per cent of the global breakdown of the economic impact of terrorism by category.
economic impact of terrorism. Indirect GDP losses are the
second largest category at 15 per cent of the total. Property The economic impact of terrorism is smaller than many other
destruction is estimated at two per cent of the global economic forms of violence, accounting for approximately 0.4 per cent of
impact of terrorism. However, property cost estimates are the total global cost of violence in 2017, which was an estimated
missing for a large number of incidents. Figure 1.7 shows the $14.76 trillion, equivalent to 12.4 per cent of global GDP.

GLOBAL TERRORISM INDEX 2018 ­| 29

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