2025 Heatwaves Cost France Over €10 Billion and Threaten Economic Growth

Recent studies highlight the severe economic impact of the 2025 summer heatwaves on France, estimating costs exceeding €10 billion. Allianz Trade projects that heatwaves could reduce France's GDP by approximately 7% annually between 2026 and 2030. This substantial economic downturn is driven by a significant drop in workplace productivity, which experts estimate at around 10%, due to thermal stress and the effects of hot nights causing sleep deprivation.

The sectors most affected include construction, agriculture, public works, and green spaces, with even some impact on the tertiary sector workforce. This widespread productivity decline is expected to slow economic growth and reduce public revenues, with tax income potentially falling by up to 1.8% annually. Meanwhile, government spending is projected to rise to cover increased healthcare needs, emergency services, disaster compensation, agricultural support, and infrastructure upgrades, reflecting the broader public finance challenges.

Despite France allocating €1.7 billion for climate adaptation initiatives, many experts consider this funding insufficient to counter these growing risks. Regulatory responses have been implemented, such as a 2025 decree enhancing employer obligations during heatwaves; however, unlike other nations, France has not set a maximum temperature threshold to prohibit outdoor work. Ségolène Journoud of Anact emphasized the need for France to learn from neighboring countries like Spain, noting that climate adaptation, especially regarding heat stress, is both a long-term societal and labor concern.

Hazem Krichene, a senior climate economist with Allianz, pointed to thermal stress as a major challenge for public policy and climate strategy in France. The escalating economic toll and adaptation efforts underline the urgency with which France must address the impact of climate change on its economy and society.