IMPACTS ON THE ECONOMY. When floods occur, the economy suffers greatly. This is because when there are floods they cause destruction to farming areas, homes, offices and shopping centres among many other infrastructures. This mass destruction leads to enormous rebuilding costs as well as food shortage.MPACTS ON THE ECONOMY. When floods occur, the economy suffers greatly. This is because when there are floods they cause destruction to farming areas, homes, offices and shopping centres among many other infrastructures. This mass destruction leads to enormous rebuilding costs as well as food shortage.