Europe’s Extreme Heat Could Erase EU Growth in 2026, Triodos Bank Warns
Impact of Extreme Heat and Drought on European Economic Growth
Overview of Triodos Bank’s Report
Aug 10 (Reuters) - The extreme heat and drought affecting large parts of Europe this summer could erase much of the economic growth expected across the region, Dutch bank Triodos said in a report on Saturday.
The bank, which specialises in financing environmentally and socially sustainable projects, estimates that heat-related disruption could shave around 1% off the European Union's gross domestic product, equivalent to roughly €180 billion ($208 billion) in economic losses, driven primarily by weaker labour productivity.
Breakdown of Economic Losses
• Labour productivity losses alone could cut EU GDP by around 0.6%, while agricultural output is expected to fall by 3% to 7%.
• "Higher food prices, constrained power generation and higher electricity prices, and disruption to roads, rail and inland waterways add to the damage," Triodos said.
Country-Specific Impacts
• France is expected to be the hardest hit, with recurring heatwaves reducing GDP by around 1.4% and potentially tipping it into an annual contraction of 0.6%.
• Italy, Spain and Belgium also face substantial losses, while countries such as Poland, which experienced fewer exceptionally hot days, are expected to be less affected.
Growth Forecasts from Major Institutions
• The European Commission has forecast EU GDP growth of 1.1%, while the IMF expects the euro area to grow by around 0.9%.
($1 = 0.8657 euros)
Reporting and Editorial Credits
(Reporting by Jakob Van Calster, editing by Milla Nissi-Prussak)
