Europe’s extreme heat could wipe out EU growth in 2026, Triodos bank says
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,…
According to Dutch bank Triodos, Europe's extreme heat and drought could significantly dampen economic growth, potentially erasing up to 1% of the EU's gross domestic product (GDP) by 2026. The loss amounts to around €180 billion ($208 billion), primarily due to reduced labor productivity. Labour productivity losses alone could shave off 0.6% of EU GDP, while agricultural output is projected to decline by 3% to 7%.
The bank attributes the damage to higher food prices, power generation constraints, increased electricity costs, and disruptions to transportation networks. France, particularly, is expected to suffer the most, with recurring heatwaves potentially reducing GDP by 1.4% and even causing a contraction of 0.6%. Italy, Spain, and Belgium are also projected to face substantial losses, while countries like Poland, which experienced fewer extreme heat days, may be less affected.
The European Commission predicts EU GDP growth of 1.1%, while the International Monetary Fund forecasts a 0.9% growth rate for the euro area.
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