Europe’s extreme heat could wipe out EU growth in 2026, Triodos bank says

Aug 10 (Reuters) - The extreme heat and drought affecting large parts of Europe this summer could erase much of the economic growth expected across the region, Dutch bank Triodos said in a report on Saturday.

The bank, which specialises in financing environmentally and socially sustainable projects, estimates that heat-related disruption could shave around 1% off the European Union's gross domestic product, equivalent to roughly €180 billion ($208 billion) in economic losses, driven primarily by weaker labour productivity.

• Labour productivity losses alone could cut EU GDP by around 0.6%, while agricultural output is expected to fall by 3% to 7%.

• "Higher food prices, constrained power generation and higher electricity prices, and disruption to roads, rail and inland waterways add to the damage," Triodos said.

• France is expected to be the hardest hit, with recurring heatwaves reducing GDP by around 1.4% and potentially tipping it into an annual contraction of 0.6%.

• Italy, Spain and Belgium also face substantial losses, while countries such as Poland, which experienced fewer exceptionally hot days, are expected to be less affected.

• The European Commission has forecast EU GDP growth of 1.1%, while the IMF expects the euro area to grow by around 0.9%.

($1 = 0.8657 euros)

(Reporting by Jakob Van Calster, editing by Milla Nissi-Prussak)