EU economy could lose €180 billion due to extreme heat

The extremely hot summer of 2026 could cost the European Union economy around €180 billion. This amount is equivalent to about 1% of the bloc’s GDP and is comparable to all the economic growth expected in the EU this year.

That’s according to Politico, citing an analysis of the economic impacts of heat.

Thus, the losses from high temperatures could nearly cancel out the expected growth of the European economy for 2026. This involves not only direct damage from individual extreme weather events but also reduced economic activity during prolonged heat.

High temperatures affect several areas of the economy. Heat reduces labor productivity, especially in construction, agriculture and other outdoor sectors. Additional expenses arise from increased electricity consumption for cooling, problems with transport infrastructure and lower crop yields.

The summer of 2026 was a period of prolonged heat and drought for many European countries. Low water levels have already disrupted shipping on major European rivers. In Austria, the low level of the Danube severely restricted freight transport, and in Germany the water level in the Rhine critically dropped.

Extreme temperatures also increase the risk of forest fires and put additional strain on energy grids. Some European countries imposed water–use restrictions this summer, and farmers warned of reduced harvests due to drought.

The €180 billion estimate shows that the consequences of extreme heat are becoming not only a climate problem but also a macroeconomic one. If the calculated damage materialises in full, the losses will be comparable to all the expected economic growth of the EU for the year.

At the same time, the final economic damage will depend on the duration of the heat and the situation in the second half of the summer. The full cost of the impacts can be assessed once data on industrial production, agriculture, energy and other sectors becomes available.