Heat Waves Set to Drain France’s Economy by $240 Billion Through 2030, Allianz Study Warns

A recent study by Allianz Trade has revealed alarming economic consequences for France due to the rising frequency and intensity of heat waves. Between 2026 and 2030, France could face a cumulative GDP loss of approximately $240 billion, the largest among European countries, according to the report.

The study indicates that heat waves have increased sevenfold since the 1980s, with the average death toll per event also surging five times. These rising temperatures severely impact workforce productivity, especially when daily highs exceed 30°C. Within the 30 to 35°C temperature range, hourly production in affected sectors drops by about $1.3 per degree, translating into an average 3% decrease in hourly output over the past decade.

Without significant adaptation measures, the share of working hours lost to heat-related thermal stress is expected to rise from 1.4% in 1995 to 2.2% by 2030. Alongside shrinking productivity, the study highlights rising energy costs, increasing by 1.2% for each additional degree Celsius, exerting inflationary pressures that risk fostering stagflation through higher prices and unemployment.

Moreover, France’s public finances are expected to take a substantial hit. Tax revenues could decline by up to 1.8% annually, as heat waves dampen economic activity. Public budgets face further strains from elevated healthcare costs, inflation-linked social transfers, and urgent infrastructure repairs, potentially deteriorating the public deficit by an extra 2.2% of GDP.

The global context is grim; the United Nations forecasts temperatures from 2026 to 2030 will remain near record highs, with a 75% chance of average increases exceeding 1.5°C above pre-industrial levels.

According to Allianz Trade, “Heat waves are not only a human tragedy but also a growing economic threat. For France, the combined effects of lost productivity, rising costs, and fiscal pressures could profoundly impact growth and public finances in the coming years.”

These findings underscore the urgent need for France to develop robust climate adaptation strategies to mitigate productivity losses and protect public budgets amid escalating heat risks.