Summer heatwaves cost Germany 25 billion euros: Allianz

Heatwaves this summer cost the German economy around 25 billion euros ($28.4 billion), according to a study published Thursday by insurers Allianz and Allianz Trade.

The loss is explained mainly by a drop in productivity linked to intense heat, higher workplace absences and longer breaks, amid limited access to air conditioning.

"This results in lost production as well as a drop in added value," the study said.

A heatwave in late June saw Germany break its all-time temperature record three days in a row, topping 42 degrees, and official data points to a record of around 16,000 heat-related deaths this year.

Europe's biggest economy has seen wildfires and serious impacts to harvests, as well as river levels dropping and restricting crucial navigation routes.

"Heat is a risk that is often underestimated," said Frank Sommerfeld, CEO of Allianz.

"It places a strain on people, infrastructure and the economy alike, and exacerbates many existing hazards such as drought, wildfires and extreme weather."

In absolute terms, Germany was the second hardest-hit European country by heat-related economic losses, behind Italy at 28 billion euros, and ahead of France, where losses were estimated at 20 billion euros.

In total, losses for the 30 European countries studied are estimated at 113 billion euros.

The study also warned against another risk linked to El Nino, a climatic phenomenon linked to unusual warming of Pacific Ocean surface water that can result in shifted rainfall patterns.

Higher global temperatures increase the likelihood of a severe El Nino developing, resulting in possible droughts and crop failures.

The 2026-27 El Nino is forecast by the World Meterological Organization to be the largest in at least 1,000 years.

El Nino could cost 144 economies nearly 392 billion euros next year and lead to a further rise in food prices in Europe, the study said.

Nearly 60 percent of the estimated gross losses would, however, be borne by China, the United States and India, Allianz climate economist Hazem Krichene said.

"Economic damage linked to climate change is expected to remain with us in the coming years," Krichene said.

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ALLIANZ