Allianz warns that the Greek economy faces the risk of a 1.1% drop in growth in the wake of a persistent heatwave. Extreme weather phenomena with high temperatures and subsequent wildfires are plaguing the European continent, with Greece, situated in the Mediterranean, feeling the effects of this environmental shift.

Based on data from the Copernicus/EMWF, the summer of 2024 was the hottest recorded, while May 2025 was the second hottest overall.

The study carried out by Allianz Trade estimated that high temperatures negatively impact productivity and economic activity. The International Labor Organization (ILO) confirms the Allianz findings, estimating a potential 2.2% decline in work hours due to heat fatigue, a figure commensurate with approximately 80 million full-time jobs.

According to The Lancet Countdown, in 2021, an estimated 470 billion work hours were lost, marking a 37% increase compared to the 1990s average.

The study revealed that employees in developing economies were likely to be more affected because of greater exposure to the elements and subpar housing conditions.

Allianz analysts predict that Spain will see a 1.4% drop in economic expansion, followed by Italy at 1.2%, with the Greek economy coming in at 1.1%. The German and French GDPs are forecast to contract by 0.1% and 0.3%, respectively.

The findings revealed that a working day over 32 degrees Celsius is roughly equivalent to half a strike day. While this could be manageable in the short-term or isolated incidents, Allianz warns that as heatwaves, droughts, and fires become the “new norm” due to climate change, solving the problem will be more difficult.

The economic adjustment to these new challenges is imperative to avoid the long-term repercussions on the economies.

The study points out that while a heatwave might result in temporary consequences on production and a potential partial recovery in retail sectors and services, harm to the agricultural sectors and infrastructure could be irreversible.