Floods that have devastated parts of southern and eastern Germany could briefly impede growth in Europe’s biggest economy, an industry body said, while ratings agency Fitch said the economic cost could be as high as €12 billion [app. $16 billion].

That would be more than the damage in 2002 when the region suffered high waters on a similar scale.

Hundreds of thousands of people in Germany, the Czech Republic and Slovakia have been evacuated from their homes in the last week as floods swept through central European cities and countryside, causing factories to halt production.

Ulrich Grillo, head of Germany’s BDI industry association said it would be difficult, but still possible, for Germany to achieve the group’s 0.8 percent growth forecast for this year.

“It is difficult to assess the influence of the floods,” said Grillo, adding that reconstruction work would in the long run probably compensate for the initial drag on the economy.

However, the economy ministry said growth had picked up in the second quarter helped by higher demand for German industrial goods and Economy Minister Philipp Roesler said the government’s forecast for 0.5 percent growth this year was manageable.

The ministry said in its monthly report for June that “the relatively long and severe winter” was one of the main reasons for a weak first quarter when the German economy grew by a mere 0.1 percent.

Chancellor Angela Merkel, facing an election in September, has promised €100 million ($133 million) in aid for flooded areas including around Passau in southern Bavaria, Dresden in the eastern state of Saxony and other more northern areas.

Cologne’s Institute for Economic Research has said the deluge could cost more than €6 billion [app. $8 billion].

Fitch said insurers could face a hit of up to €3 billion [app. $4 billion] from damage claims, but there would be no big threat to their credit ratings.

Carmaker Volkswagen was one of the companies forced to shut a plant in the eastern state of Saxony and shipping on the Rhine was interrupted.

Germany’s big stock-market listed insurance companies, Allianz, Munich Re and Talanx have said it is too early to estimate the size of damage claims.

Industry trade body GDV said it had to be assumed that the insured losses from the current flooding would be larger than the €1.8 billion [$2.4 billion] bill insurers footed in 2002 for floods in the region, a view echoed by several big property insurers.

Separately, Vienna Insurance Group estimated it faced a hit of €40 million to €45 million [$53.25 to $60 million], twice the €20 million [$26.6 million] that the 2002 floods caused.

It stressed that the overall assessment was still in flux, with the main reported damage so far in the Czech Republic and Austria. It was unable make predictions for Slovakia, Hungary and other countries along the Danube.

(Reporting by Gernot Heller in Berlin, Jonathan Gould and Alexander Huebner in Frankfurt and Michael Shields in Vienna; Writing by Madeline Chambers; Editing by Ruth Pitchford and Susan Fenton)