JAKARTA - The extreme heat wave that hit Europe has begun to burden economic activity in various countries, especially Germany as the largest economy in the region.
Economists and international organizations warn that heat waves that are becoming more frequent due to climate change are no longer seen as temporary events, but rather structural macroeconomic risks that can threaten investment and production.
Record-breaking June temperatures in a number of European countries have made France, Britain, Switzerland and Germany the hottest June in recent years.
The heatwave in France even recalled the events of the summer of 2003 which are estimated to have caused around 70 thousand deaths.
As reported by ANTARA from Anadolu, Tuesday, June 30, hospitals in several European countries reported critical conditions due to disruptions in cooling systems and information technology infrastructure, while France was forced to temporarily suspend operations of two nuclear reactors.
ING's Head of Macro Research and Chief Economist for Germany, Carsten Brzeski, wrote on Monday (29/6), that the record-breaking heat wave in Europe has changed from just a weather event into a macroeconomic variable that shakes the region's economy, reminiscent of the impact of activity restrictions during the COVID-19 pandemic.
According to Brzeski, deserted streets, closed schools, disrupted train services, and the shutdown of nuclear reactors in France due to a lack of cooling water left a long-term impact on both public health and the European economy.
"It turns out that the thermometer has become the main indicator of economic growth. The heat wave presents a new risk of decline for European growth," he said.
He said heat-related risks have so far been considered a Southern European problem, but the latest data show Germany could potentially rank third in Europe in cumulative economic losses from hot weather by 2030.
"Not because the German summer will be equivalent to Sevilla, but because infrastructure, housing, and labor-intensive sectors such as construction and logistics are built for a cooler climate and have not been able to adapt," he said.
Brzeski quoted a report from Climate Analytics in January 2026, which was compiled at the request of the World Bank, and said Germany still lacked comprehensive measures to deal with heat stress, while adaptation planning lagged behind scientific developments.
He also added that the European Commission's business survey increasingly shows weather as a factor limiting production. In recent summers, Spain and Germany have recorded the largest disruptions due to heat waves.
Although lower energy prices can help households and businesses a little, Brzeski assessed that extreme heat remains a major obstacle to economic growth due to the threat of supply disruptions, declining water levels, damage to transportation infrastructure, and reduced labor productivity.
He cited a 2021 study that estimated the years with the worst heat waves in Europe, namely 2003, 2010, 2015, and 2018, caused economic losses of 0.3 - 0.5 percent of GDP due to reduced labor productivity, even exceeding 1 percent in the most affected areas.
"If you add the cost of cooling, the increase in health costs, the repair of emergency infrastructure, and the impact on transportation, waterways, and agriculture, the negative impact on the economy becomes much greater," said Brzeski.
Food inflation doubles
Economists estimate that the largest impact of extreme heat will be felt in the agricultural sector and food prices as drought reduces crop yields.
Previously, the European Central Bank (ECB) estimated that heat waves and droughts could push food inflation by around 0.4-0.9 percentage points, and the impact could potentially double in the next 30 years.
Brzeski said extreme heat is now a structural economic risk for Europe. He quoted an Allianz Trade analysis which estimated that Germany faces the risk of losing cumulative GDP of US$131 billion (around Rp2.34 trillion) in the period 2026-2030.
Temperatures above 30 degrees Celsius are estimated to cause economic losses of up to US$ 240 billion (around Rp. 4.28 trillion) in France, US$ 147 billion (around Rp. 2.62 trillion) in Italy, and US$ 120 billion (around Rp. 2.14 trillion) in Spain due to reduced productivity and increased energy costs. However, Germany is expected to bear a very heavy burden.
Official data shows that heat waves previously considered a temporary and recoverable cost are now inflicting long-term damage on the European economy as extreme heat directly depresses GDP output and triggers inflationary pressures through supply chain disruptions.
"A joint paper with the University of Mannheim and the ECB last year also calculated the economic damage caused by heat waves, droughts, and floods in the summer of 2025. According to the study, the European economy lost about 0.3 percent of output, and the cumulative losses could reach 0.8 percent by 2029 due to lost productivity, supply chain disruptions, and reduced tourism revenues," said Brzeski.
He added that the World Bank report calls for urgent measures to address the risk of declining worker productivity and damage to infrastructure, including tax incentives to encourage private sector investment in building insulation, shading, and air conditioning systems.
According to Brzeski, adaptation to extreme heat is now not just an environmental policy, but an economic necessity to maintain Europe's productivity and competitiveness.
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