Extreme heat to cost Spanish economy $120 billion by 2030, Allianz report says

A new report from Allianz estimates that extreme heat will cost the Spanish economy up to $120 billion (€105 billion) by 2030, equivalent to 7% of GDP. The study projects that under a heat stress scenario, tax revenue could fall by 1.3%, wages could drop by 0.7% to 1.3%, consumer prices could rise by a cumulative 1.9%, and unemployment would increase. Spain is identified as one of the European economies most exposed to extreme heat, with losses already running into the billions. The report highlights that the economic damage will worsen progressively through the end of the decade. The findings are based on an analysis by Allianz, a major global insurer, and underscore the growing financial burden of climate change on vulnerable economies.

Global Impact

Economically, the report reinforces that climate change is a material fiscal risk for southern European economies, potentially leading to higher borrowing costs and slower growth. Politically, it may accelerate EU-level discussions on climate adaptation funding and disaster relief mechanisms.