Hungary faces crisis due to drought and falling river levels
Hungary has faced “dramatic” economic consequences of prolonged drought and extreme heat. Prime Minister Peter Magyar stated this on Friday, August 7, while speaking with journalists.
The problems have already gone far beyond agriculture. The lack of precipitation led to a sharp drop in the water level of the Danube, which simultaneously complicated power generation, cargo transportation, and the operation of the agricultural sector.
Agriculture was especially hard hit. The Joint Research Center of the European Commission noted at the end of July that the most serious consequences of heat and moisture deficit among countries in the region are observed precisely in Hungary. Low soil moisture had a negative impact on both winter and summer crops.
The country's government has already had to ease the rules for recording drought damage for farmers. Hungarian authorities recognize drought as one of the most serious risks for the national agricultural sector, and call preserving soil moisture one of the key tasks for producers.
Another consequence was the record low level of the Danube. In early August, the river level in Budapest dropped to about 10 centimeters — significantly lower than the previous historical minimum. Due to water scarcity, serious problems arose at the Paks nuclear power plant, which uses Danube water to cool reactors. At the beginning of the week, its power production fell to about 240 MW, compared to a normal capacity of about 2 GW.
By August 7, the situation had slightly improved, and part of the NPP's capacity was able to be brought back online after a small rise in the water level. However, risks to the energy system persist against the backdrop of heat and high electricity demand. Paks is a key source of electricity for Hungary, so a prolonged shutdown of the units would create additional strain on energy imports and other generating capacities.
The low level of the Danube is also hampering river cargo transportation. Vessels in Hungary and other regional countries are forced to reduce loading, and delays occur on certain sections. This increases the cost of transporting grain, raw materials, fuel, and other products and creates additional challenges for companies using the Danube as a transport corridor.
Thus, the current drought is simultaneously pressing on several areas vital to Hungary's economy – crop yields, energy, and logistics. Peter Magyar did not name the exact monetary estimate of the total damage in the Bloomberg statement.
Based on materials from: Bloomberg
