Europe’s economy is set to lose about €113 billion this year after last summer’s extreme heat cut productivity and output across many countries, German insurer Allianz said on Thursday.
The insurer said Italy is expected to suffer the biggest hit to gross domestic product, at €28 billion, followed by Germany with €25 billion and France with €20 billion.
According to Allianz, extreme heat led to lower productivity, longer breaks and higher levels of absence from work.
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Across Europe as a whole, the negative impact is expected to amount to just under 0.5% of projected economic output this year.
The estimates come from Allianz’s new Climate Risk Tracker, a tool that combines weather data and claims information with predictive models of economic impact.
Allianz also warned of fresh economic risks next year linked to El Niño, the natural climate pattern declared in June whose peak is expected later this year.
It said El Niño is on course to become the strongest ever recorded, intensifying the effects of human-induced climate change.
If 2027 turns out to be another exceptionally hot year, economic output in the 144 countries analysed by Allianz could be reduced by €392 billion, with China expected to face the largest losses.
