The European Commission warned on Monday that mounting climate risks, illustrated by the extreme heat, wildfires and floods that ravaged parts of Europe this summer, could hit the region’s economy as soon as this year.
Its latest Economic forecasting, The European Union’s executive branch lowered its forecasts for growth in the region in 2023 and 2024. But that said, even that bleak outlook can be very hopeful.
“The materialization of these [climate] „The risks bear heavy costs for the EU economy, in terms of losses in natural capital and a decline in economic activity, including tourism,” the Commission said.
It now expects EU GDP to grow 0.8% this year, down from a 1% rise forecast in the spring. Next year growth has been revised down from 1.7% to 1.4%.
The commission blamed weak domestic demand, slowing down High inflationas well as Rising interest rates For downgrades. But it added that there was „strong uncertainty” in its latest forecast, with extreme weather among the „downside” risks.
In some countries in the region, tourism can generate as much as a fifth of annual GDP. The Europeans have already started Review Where to holiday in the future after the warmest temperatures in southern Europe this year and the continent’s hottest summer on record in 2022.
The European Travel Commission, an association of tourism organisations, said in July that the number of European tourists planning to visit Mediterranean destinations this year fell by 10% compared to the same period in 2022. Meanwhile, the Czech Republic, Bulgaria, Ireland and Denmark, where the weather is milder, have seen a „surge in popularity”, ETC noted.
Travelers from outside the EU will also miss out on a taste of their holiday Italy And Greece, both are battling wildfires. A spokeswoman for travel data company ForwardKeys told CNN in July that „the preference has shifted towards cooler and more northern destinations” among UK travelers as a result of the heatwaves in continental Europe that month.
Blistering temperatures are already bad news for olive trees, for the second year running, with industry experts warning of rising prices and possible shortages of olive oil. In Spain, the world’s largest producer of olive oil, production has already fallen.
The full extent of this year’s heat damage won’t be known until harvest time in October and November, but European Olive oil production 700,000 metric tons could sink – a drop of more than 30% compared to its five-year average – according to Kyle Holland at market research group Mintec.
Like the European Commission, the International Monetary Fund on Sunday pointed to „serious risks to economic well-being” from climate change.
„G20 members must lead by example in committing $100 billion a year to climate finance,” IMF Managing Director Kristalina Georgieva said at the Group 20 summit in India.
„Countries must mobilize domestic resources to finance and manage the green transition through tax reforms, effective and efficient public spending, strong financial institutions and deep local credit markets.”