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Heat waves could cut EU output and raise food and power costs

Triodos expects labor productivity losses could reduce EU GDP by about 0.6% this year, while agricultural output may fall 3% to 7% amid repeated extremes.

Reported · Written up by our desk · Energy

This year’s heat waves could significantly weigh on Europe’s economy, with Dutch bank Triodos warning they may erase as much as 1% of European Union gross domestic product by compounding productivity declines and weaker agricultural output.

Triodos expects labor productivity losses due to extreme heat waves to reduce EU GDP by around 0.6% this year. The bank also projects agricultural output could fall by 3% to 7% as heat events disrupt farming.

The impact comes as EU growth forecasts already face headwinds. After EU GDP growth reached 1.5% in 2025, the European Commission projects growth to slow to 1.1% this year, citing a reduced outlook nearly three months after the war in Iran disrupted oil and gas flows through the Strait of Hormuz.

Triodos said higher food prices, constrained power generation, and higher electricity prices, along with disruptions to roads, rail, and inland waterways, add to the damage. It also flagged France as likely to be hit hardest, with GDP there potentially dipping about 1.4% due to several extreme heat waves.

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