Heatwaves may cut GDP by 0.5 pct points in Europe, Allianz says

Productivity losses due to heat can be mitigated, Allianz Research said, calling for structural measures to prepare cities and adapt workplaces.

Recent heatwaves across Europe could slow economic growth in Europe by half a percentage point in 2025, a report by Allianz Research showed, comparing a day with temperatures above 32 degrees Celsius to half a day of strikes.

In Europe, GDP losses range from 0.1 percentage points for Germany to as much as 1.4 percentage points for Spain, where temperatures are around ten degrees higher in summer. Climate change is increasing the frequency and intensity of heatwaves, droughts and wildfires, with far-reaching economic repercussions.

Globally, the heatwaves translate to a GDP reduction of 0.6 percentage points this year, Allianz Research said. China, Spain, Italy and Greece could each see GDP losses of nearly one percentage point due to the current heatwaves, the Allianz Research report said, while the U.S. may face a decline of around 0.6 percentage points and France of up to a third of a point.

Extreme temperatures also reduce labour productivity, with the International Labour Organization forecasting that heat stress will reduce total potential working hours worldwide by 2.2% by 2030. Productivity losses due to heat can be mitigated, Allianz Research said, calling for structural measures to prepare cities and adapt workplaces.

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