The extreme heat and accompanying drought in Western Europe could cost the EU economy 180 billion euros. The EU's GDP could lose 1%, which would indicate an economic stagnation in 2026, according to a report by the Netherlands' Triodos Bank. This was reported by Reuters.
According to the bank's analysis, the most significant impact on GDP dynamics will come from a decline in labor productivity. Analysts have estimated the impact of this factor at 0.6% of the EU's GDP. The remaining impact will arise from losses in agriculture, energy production, rising food prices, and losses caused by disruptions in transport, primarily river transport.
The losses for EU countries will be uneven. The largest damage will be suffered by the French economy, whose GDP is expected to decrease by 0.6% for the year, while economic growth will drop by 1.4 percentage points. The heat will also significantly impact the economies of Italy, Spain, and Belgium.
Conversely, the weather's impact in Eastern Europe is expected to be less severe; specifically, Poland's GDP could grow by nearly 3% for the year.
“A 1% loss in GDP this year will mean stagnation. This is real damage, though not catastrophic. However, this year's extreme heat is just a foretaste of what awaits us if we do not respond quickly and decisively to climate change,” commented the report's chief economist Hans Stegeman.
