World Economy

US Estimates Cyber Attacks Cost Up to $109b in 2016

Cyber threats are ever-evolving.Cyber threats are ever-evolving.

The White House released a report that found that the economic costs of “malicious cyber activity” in 2016 were between $57 billion and $109 billion. The estimate comes in a Council of Economic Advisers report on the impact of cyber attacks on US government and industry. 

“Cyber threats are ever-evolving and may come from sophisticated adversaries,” the CEA said in its report. “Due to common vulnerabilities, instances of security breaches occur across firms and in patterns that are difficult to anticipate,” Asharq Al Awsat reported.

The CEA’s estimate represents between 0.31% and 0.58% of the 2016 US GDP. For comparison, the report cites a Center for Strategic and International Studies report that estimated the cost of malicious cyber activities against US entities at $107 billion in 2013, 0.64% of GDP that year.

The industries making up the largest shares of GDP also saw the highest shares of security breaches in 2016, according to the report. This includes manufacturing, government, healthcare and finance. The finance sector had the highest breaches of all industries, with 471 in 2016.

The report also notes that because big cyber attacks could create knock-on effects throughout the economy, individual private firms are incentivized to “rationally under invest in cyber security” relative to the collective threat it poses.

The report concluded that better data and more cooperation “across firms and between the public and private sectors” are required to protect against such attacks. That was also one of the takeaways from top intelligence officials at a Hill hearing on global threats earlier this week.

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