Recent heat waves could cut global growth by almost 0.6 percentage points in 2023 with several European countries particularly impacted, according to an estimate by Allianz Trade.
The credit insurance company forecast in a study published this week that Spain’s Gross Domestic Product (GDP) could be slashed by one point, Greece’s by 0.9 points, Italy’s by 0.5 points and France’s by 0.1 points.
“One day of extreme heat, in excess of 32 degrees (Celsius), is equivalent to half a day’s strike,” Allianz Trade said.
The credit insurer, which combined available data and studies to reach its estimates, expects that heat events this year “could have cost 0.6 points of GDP” globally, adding that this “is significant and highlights the weight of climate risks”.
“In recent months, the United States, Europe, China and other countries in Asia have experienced record-breaking temperature rises […] Climate change will increase the frequency and intensity of extreme heat events, creating a ‘new normal’ of heat waves, droughts and wildfires. Such events have an impact not only on people and wildlife, but also on economies,” Allianz Trade wrote in its study.
It also said that “employees affected by heat reduce their working hours, slow down in their tasks and make mistakes. The reduction in productivity at work resulting from extreme temperatures is a well-known phenomenon.”
China’s GDP could be negatively impacted by as much as 1.3 points while the US’s economy could be imputed by 0.3 points.
The European Copernicus service confirmed on Tuesday that July 2023 was the hottest month ever observed on Earth since records began.
The past July was 0.33°C warmer than July 2019, which had held the record until now with an average temperature of 16.63°C.
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