The European Central Bank has highlighted the significant relationship between extreme heat and critical economic factors like inflation and gross domestic product. Executive Board member Frank Elderson emphasized that the connection cannot be overlooked.
Elderson noted progress in recognizing the relevance of climate and environmental challenges to economic stability. He pointed to the unusually hot summer of 2022 as a clear example, explaining that food-price inflation rose by 0.4 to 0.9 percentage points during that period. Additionally, German GDP experienced a measurable decline linked to the extreme weather conditions.
— news from Bloomberg
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ECB Warns of Impact of Heat Waves on Inflation, GDP Growth
The link between heat and key economic indicators such as inflation and gross domestic product is too important to ignore, according to European Central Bank Executive Board member Frank Elderson .
“We have progressed in understanding that accounting for the climate and nature crises is relevant,” Elderson said in an interview. “If you think about the exceptionally hot summer of 2022, food-price inflation was up between 0.4 and 0.9 percentage points” and “there was quite a measurable hit on German GDP.”