Brussels, Belgium (Enmaeya News) — Extreme weather events across Europe this summer caused at least €43 billion ($50 billion) in short-term economic losses, according to European Union estimates, with costs projected to soar to €126 billion ($148 billion) by 2029.
The analysis, published this month in an academic study, found that one season of heat, drought and flooding shaved 0.26% off the EU’s economic output in 2024.
The heaviest losses were recorded in Cyprus, Greece, Malta and Bulgaria, where short-term damage exceeded 1% of gross value added — a measure similar to GDP. Mediterranean economies including Spain, Italy and Portugal followed closely behind.
Economists from the University of Mannheim and the European Central Bank described the findings as “conservative,” noting they did not account for record wildfires that swept southern Europe in August, or for multiple extreme weather events striking at once.
“The true costs of extreme weather reveal themselves slowly,” said Sahar Othman, lead author of the study and an economist at Mannheim University. “These events affect people’s lives and livelihoods through channels that go far beyond their immediate impact.”
The study also linked climate change to the surge in disasters. Research shows climate breakdown made massive wildfires 40 times more likely in Spain and Portugal, and 10 times more likely in Greece and Turkey. Heat-related deaths in June alone tripled across 12 major cities, driven by pollution tied to global warming.
Unlike previous assessments focused on direct costs such as damaged assets or insurance claims, the researchers measured historical correlations between severe weather and economic activity. Their method captures knock-on effects such as reduced working hours during heatwaves and travel delays from flood-damaged railways.
Stéphane Hallegatte, senior climate economist at the World Bank, who was not involved in the study, said the research underscores that wider economic effects of extreme weather last longer and cut deeper than direct damages.
But he cautioned that relying on “imprecise indicators” may underestimate the overall toll. “Gross value added does not cover the full costs on individuals and businesses, or the benefits of risk reduction,” Hallegatte said.
Other experts highlighted hidden costs. Gert Peñens, an economist at the National Bank of Belgium, pointed to supply chain disruptions as a major overlooked factor. A study he co-authored on Belgium’s devastating 2021 floods found that manufacturers far from the disaster saw sharp drops in sales if their suppliers were located in flooded areas.
Ignoring such ripple effects could mean damages are underestimated by about 30%, Peñens said. “The key message is that extreme weather already leaves a major economic footprint — and its indirect effects can be just as damaging as the direct disaster itself.”
