Heatwave could cost France 0.3 points of GDP

When the mercury rises, economic activity declines. This phenomenon, which anyone can observe empirically, has not escaped economists' attention. According to calculations by Allianz Trade, the heatwave currently hitting Europe will have a significant impact on growth. The continent's gross domestic product (GDP) could lose 0.5 percentage points in 2025 due to the heatwave, estimates Ludovic Subran, the insurer's chief economist, in a note published Tuesday, July ¹ .

The toll varies depending on the geographical location and climate of each European country. Germany, less exposed to heat than southern Europe, would be little affected (-0.1 percentage points of GDP). Conversely, Spain, which is experiencing record highs in these first days of July, would see its growth reduced by 1.4 percentage points. Italy, where the heatwave is also raging, would lose 1.2 percentage points of growth, and Greece, better adapted to high temperatures, would lose only 1.1 percentage points.

France, despite the 38°C recorded on Tuesday in the capital – and sometimes more than 40°C in the southern part of the country – is in an intermediate position: 0.3 points of GDP threaten to evaporate in the surrounding swelter, or a little less than half of the growth hoped for by the government (+0.7%).

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