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Ulviyya Poladova

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A study by Netherlands-based Triodos Bank estimates that anomalous weather conditions and prolonged drought observed across Europe this summer could cost the European Union (EU) economy around €180 billion and wipe out previously forecast economic growth, AzerNEWS reports.

Triodos Bank published a study titled "Hot Summer Economics", examining the economic impact of extreme heat across Europe.

The study noted that record temperatures and prolonged drought are negatively affecting not only human health and ecosystems, but also agriculture, the energy sector, transportation and labour productivity.

According to the bank’s latest analysis, extreme weather conditions observed during the summer could reduce the EU’s gross domestic product (GDP) by around 1% in 2026. This is equivalent to approximately €180 billion and would effectively eliminate the economic growth previously forecast for the year.

The research found that the largest economic impact of extreme heat stems from declining labour productivity. Productivity begins to fall significantly when temperatures rise above approximately 25–30°C.

The impact is particularly severe for workers engaged in physically demanding jobs, those working outdoors and employees in workplaces without air conditioning. Extreme heat can also affect office workers’ performance and sleep quality and contribute to increased absenteeism during hot days.

The study estimates that reduced labour productivity caused by high temperatures in the summer of 2026 could result in an average loss of around 0.6% of EU GDP.

Agricultural production across the EU is also expected to decline by between 3% and 7% due to extreme heat and drought. Rising food prices, restrictions on energy generation, higher electricity prices, and disruptions to roads, railways and inland waterways are expected to further increase the economic damage.

France is projected to be the country most severely affected by extreme heat. Repeated heatwaves are expected to reduce the country’s GDP by around 1.4%, contributing to an estimated 0.6% contraction of the French economy over the year.

Significant economic losses are also expected in Italy, Spain and Belgium.

Meanwhile, the European Commission had previously forecast that the EU economy would grow by 1.1% this year.