Severe heatwaves could cost German economy over $23 billion annually

Germany's economy could face annual losses exceeding €20 billion ($23 billion) if severe heatwaves become a regular occurrence, according to a study by economic research firm Prognos. The analysis, prepared for the German business daily Handelsblatt, estimates that each day with temperatures above 35°C costs the EU's largest economy nearly €1 billion ($1.15 billion).

Recent Heatwave Costs

The heatwave during the final two weeks of June alone cost Germany an estimated €6.32 billion ($7.25 billion), the study found. Prognos warned that the country could experience three or four heatwaves of similar intensity each year in the future, pushing annual economic losses above €20 billion. Manufacturing is the sector most affected by extreme heat, followed by health and social services, retail, construction, and the food industry.

Hidden Costs and Broader Impact

The researchers noted that their estimates do not include several potential costs, such as higher energy prices, machine breakdowns, supply chain disruptions, and long-term infrastructure damage. They said total economic losses could be even higher once those factors are taken into account, pointing to the growing vulnerability of industrial economies to climate-related extremes.