Heatwaves across Europe this summer are projected to have a substantial economic impact, with economists from the Dutch bank Triodos estimating a potential €180bn reduction in EU GDP. In the UK, the green thinktank Verdant reported this week that the heat had already cost the economy £4.4bn by the end of July.
Across mainland Europe, major economies are experiencing diverse challenges. France could see 1.4 percentage points knocked off its GDP, potentially pushing the economy into reverse, partly due to lost energy output as nuclear plants shut down when river temperatures become too high. Up to 15% of France's nuclear estate was expected to be offline on Friday due to soaring temperatures.
Germany faces threats to its economy from low water levels in the Rhine, a critical freight route for coal, crude oil, gas, and refined products. Water levels near Kaub have fallen below critical levels, forcing barges to lighten loads and nearly halting ship traffic. Despite this, Triodos economists expect Germany's aggregate GDP impact to be less than a percentage point.
Italy, with its reliance on tourism and agriculture, is particularly exposed, with Triodos reckoning 1.1 percentage points could be wiped off its GDP. Spain, despite devastating wildfires, may see a relatively minor economic hit, with tourism spending largely unaffected, though Triodos expects almost 1 percentage point to be knocked off its 2.8% growth forecast.