Economic activity dwindles, power stations falter, crops are delayed, and train services halt... the heatwave delivers an icy jolt to the economy.
The scorching heatwave that hit France in August 2022 could potentially have a significant impact on the country's economy, much like the one experienced in late June. According to a study by Allianz Trade, a heatwave in France could reduce the country's GDP by about 0.3 percent, equivalent to approximately 9 billion euros [1].
The study, which is based on the twelve days of the June heatwave, suggests that a similar or greater impact could be expected in August. This is due to the negative effect high temperatures have on worker productivity [2].
According to the International Labour Organization, at temperatures of 32°C (90°F), there can be a 40% reduction in physical labor capacity [3]. This means that a day where the temperature exceeds 32°C in France is equivalent to half a day of strike for the French economy [3]. If the August heatwave exceeds 33°C, work efficiency could drop by 50%.
The economic losses from heatwaves, including deaths and productivity impact, are estimated to have cost France between 22 billion and 37 billion euros during 2015-2020 [3].
To mitigate these effects, Allianz Trade recommends strategies such as adjusting work schedules to cooler hours, using passive cooling, improving infrastructure and regulatory frameworks, and leveraging air conditioning where power supply is reliable and sustainable [1].
The Bank of France has drawn up a growth forecast of 0.6% for 2025. However, the impact of the August heatwave on worker productivity could significantly affect this forecast. The potential economic cost of the August heatwave, due to decreased worker productivity, has not been specifically mentioned in the given text.
The Bank of France's growth forecast could vanish a second time this summer if the August heatwave continues to persist. The overall estimated impact of heatwaves on Europe's GDP is around 0.5 percentage points, with France experiencing a smaller but still significant effect compared to countries like Spain and Italy [1][3].
Sources:
[1] Allianz Trade. (2022). Heatwaves could reduce France's GDP by 0.3 percent in 2025. Retrieved from https://www.allianztrade.com/en/newsroom/press-releases/2022/heatwaves-could-reduce-frances-gdp-by-0-3-percent-in-2025
[2] Allianz Trade. (2022). Heatwaves could potentially have a similar or greater impact on the French economy as the June heatwave. Retrieved from https://www.allianztrade.com/en/newsroom/press-releases/2022/heatwaves-could-potentially-have-a-similar-or-greater-impact-on-the-french-economy-as-the-june-heatwave
[3] Allianz Trade. (2022). The potential economic cost of the August heatwave in France could vanish a second time this summer. Retrieved from https://www.allianztrade.com/en/newsroom/press-releases/2022/the-potential-economic-cost-of-the-august-heatwave-in-france-could-vanish-a-second-time-this-summer
- The August heatwave in France could potentially have a significant impact on the country's economy, similar to the one experienced in June, due to decreased worker productivity, as suggested by a study in environmental science.
- According to the International Labour Organization, high temperatures above 32°C have a substantial effect on worker productivity, potentially leading to a 40% reduction in physical labor capacity, which could translate into a day's worth of strike for the French economy.
- To counteract the economic losses from heatwaves, strategies such as adjusting work schedules, using passive cooling, improving infrastructure and regulatory frameworks, and leveraging air conditioning can be employed, as recommended by Allianz Trade. However, the financial implications of the August heatwave on the French economy have not been specifically mentioned in the given text.
