Key facts
- Europe's summer heat is expected to cost the EU economy €180 billion, or 1% of GDP.
- France's economy could contract by 0.6% due to a 1.4-percentage-point loss in growth.
- Lost labor productivity is estimated to reduce EU GDP by 0.6%.
- Agricultural output in Europe could fall by 3-7%.
- At least 14,000 excess deaths are estimated in six European countries from heat waves.
- Drought has impacted energy production and transportation across Europe.
Europe's scorching summer is projected to erase its economic growth for 2026, costing the EU economy an estimated €180 billion, according to new analysis by Triodos Bank. This figure is equivalent to approximately 1 percent of the bloc's GDP, negating all expected growth for the year.
France is particularly vulnerable, with the heat expected to shave 1.4 percentage points off its growth, potentially pushing its economy into a 0.6 percent contraction. The Netherlands could also see its expected expansion nearly wiped out by an 0.8-point hit.
The analysis highlights that the impact is not solely determined by the hottest countries, as decades of acclimatization in places like Spain and Italy mean the marginal effect of a single hot day is smaller compared to other regions. The primary drag is anticipated from reduced labor productivity due to extreme heat, which Triodos estimates could cut EU GDP by 0.6 percent. Agricultural output is also forecast to decline between 3 and 7 percent.
Beyond the economic figures, the record-breaking heat waves have led to significant human costs, with POLITICO estimating at least 14,000 excess deaths across six of the hardest-hit European countries between mid-June and early July. The drought conditions have also strained Europe's energy infrastructure, forcing cuts at Hungary's Paks nuclear plant due to low water levels in the Danube and impacting shipping on the Rhine and Danube rivers. Austria alone has reported an estimated €1 billion in agricultural losses.
Triodos Bank cautions that such extreme heat events may become structural rather than isolated incidents as global temperatures rise. The bank suggests that governments can mitigate some of the damage through measures like improved irrigation, insulation, cooling systems, and adjusted working hours, emphasizing that adaptation without mitigation is a temporary solution.