Drought and extreme heat that have affected large parts of Europe could erase a significant portion of the region’s expected economic growth this year, Dutch bank Triodos warned in a new report.
The bank, which specializes in financing environmentally and socially sustainable projects, estimates that heat-related disruptions could reduce the EU’s gross domestic product (GDP) by about one percent.
This means economic losses of 180 billion euros, mainly due to lower labor productivity, Triodos estimates, according to Reuters today.
EU GDP losses due to reduced productivity are estimated at around 0.6 percent, while agricultural production is expected to decrease by 3-7 percent.
“Higher food prices, limited electricity production and more expensive power, as well as problems in road, rail, and inland waterway transport further increase the damage,” the bank stated in the report.
France is expected to be the hardest hit, with recurring heatwaves reducing GDP by 1.4 percent and potentially leading to an annual decrease of 0.6 percent.
Italy, Spain, and Belgium are also facing significant losses, while countries such as Poland, which have experienced fewer hot days, are expected to be less affected, Reuters reports.
The European Commission estimates EU GDP growth this year at 1.1 percent, while the International Monetary Fund expects eurozone growth to be 0.9 percent.
Your perspective is part of the story
Read other perspectives and join the conversation.