The term "drought" generally has different degrees of meaning, depending upon the normal climate of the country where drought is occurring. For example, in a tropical country, where heavy rainfall is the norm, drought may refer to a period of a matter of mere weeks without rain.
In its truest sense, though, drought is an extended period of lack of rain, which has economic repercussions on the country. In a country such as Australia where droughts continue for years, this may have the following effects:
- hinders a farmer's income by limiting his ability to produce crops and/or healthy livestock
- drives up prices of goods due to limited supply
- increases inflation as a result of price increases
- contributes to unemployment as businesses, suffering loss of profits, are forced to close down and farms are forced to sell up
- increases the danger of bushfires, duststorms and other drought-related natural disasters
- increased desertification, i.e. once fertile land becomes desert, a situation from which the land rarely recovers
- causes people to relocate, thus contributing to the death of towns
- causes death to native animals, not only from lack of food and water, but also because drought can drive introduced species such as foxes and feral cats, which tend to be hardier than the native animals, to kill more native animals in the quest to survive.
In less developed countries, drought leads to famine. It also causes diseases as there is less water available for basic hygiene and sanitation. Although not yet an issue in Australia, wars have even been fought over access to available water.
See also the related question.