Dutch bank: Extreme heat could wipe out Dutch, EU economic growth this year

Dutch bank: Extreme heat could wipe out Dutch, EU economic growth this year | NL Times

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Sunday, 9 August 2026 - 12:15

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Dutch bank: Extreme heat could wipe out Dutch, EU economic growth this year

Extreme heat is expected to largely wipe out projected economic growth in the Netherlands this year, according to a new report from the Dutch bank Triodos. The same conditions are hitting the wider European Union hard enough to erase the bloc’s overall expected growth. Triodos, which describes itself as one of the most sustainable banks in the world, estimates that EU gross domestic product will fall 1.1 percent because of the heat. That figure matches the expected growth rate for the year. In the Netherlands, the bank says the projected economic growth will be largely negated. Chief economist Hans Stegeman said quantifying the economic impact of heat is difficult. “It concerns the possible economic damage. But in our opinion, we are on the conservative side with this percentage.” In the Netherlands, expected economic growth is largely wiped out. “The economy is not set up for this here, so the effects quickly become very large,” Stegeman told NOS. France faces the largest economic hit overall, followed by Italy and Spain. The largest driver of economic decline from heat is lost labor productivity, Stegeman told the newspaper. The effect is strongest in sectors with high exposure to heat, including construction, agriculture, and other physically demanding jobs. Productivity can also fall in office work, especially in buildings without air conditioning. Air conditioning use is rising in the Netherlands but remains far behind levels in Italy and Spain. “If it’s cooler, people can work better. But ACs are not a long-term solution,” Stegeman told NOS. “What would be much better is climate-resilient building.” Agriculture is among the sectors suffering most. Forecasts for crop yields across Europe have already been lowered because of the warm weather. Energy supplies are also under strain. Last week in Hungary, a nuclear power plant was shut down because water levels in the Danube were too low for cooling. Solar panels become less efficient when they overheat. Higher demand for electricity from air conditioning pushes energy prices up, which hurts industry, businesses, and households. Transportation is affected as well. Low water levels have left some companies in the Netherlands and Germany unreachable by shipping. As an exception, trucks are now allowed on the roads on Sundays in both countries. Heat also causes steel to expand, reducing capacity on the rail network. Stegeman called the economic damage from this summer “a foretaste” of what is coming. Beyond adaptations such as different building methods or growing more heat-tolerant crops, he said politicians need to put greater emphasis on prevention. “Because every ton we emit less causes less warming in the future.” Economist Henri de Groot of Vrije Universiteit told NOS that research into the economic effects of climate change is complicated and requires care to avoid overlap or double-counting in calculations. “The consequences of climate change are becoming more visible, so we can actually measure the economic consequences. In the past, reports were often based on models and assumptions.” De Groot said studies of economic contraction linked to climate change are relevant, “but my question would mainly be: who does the heat hit the most?” He noted that some research indicates climate change primarily affects financially vulnerable groups in society.

Dutch bank: Extreme heat could wipe out Dutch, EU economic growth this year

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