updated 9/2/2005 3:02:23 PM ET 2005-09-02T19:02:23

The likelihood of a recession has doubled in the aftermath of Hurricane Katrina, credit rating agency Standard & Poor’s said Friday.

The likelihood of a recession has increased from less than 12 percent to 25 percent following Katrina, the agency said.

“What would drive it is $100 (a barrel) oil prices,” said Beth Ann Bovino, a senior economist at S&P. “While the possibility has risen, we’re pretty confident of the health of the U.S. economy.”

Insurance risk assessment companies estimate that insurance claims from Katrina could top $25 billion, but once damage to roads and bridges is factored in, Katrina could cost $50 billion, S&P said.

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