The Rhine River runs low near Dusseldorf, Germany, as a prolonged heat wave and drought drain water levels. [AP]
The Rhine River runs low near Dusseldorf, Germany, as a prolonged heat wave and drought drain water levels. [AP]

A heat wave that has gripped most of Europe since early summer could shrink the EU's GDP by 1 percent this year, according to a new forecast.

Dutch bank Triodos warned in a recent report that the heat wave could inflict economic losses of 180 billion euros ($208 billion) on the EU, German weekly Der Spiegel reported Monday.

That figure would wipe out most of the 1.1 percent economic growth the European Commission had projected for this year.

Triodos estimated that reduced labor productivity alone would cut EU member states' GDP by 0.6 percent, while agricultural output would fall by 3 to 7 percent.

The report said rising food prices, reduced power generation, higher electricity bills and disruptions to road, rail and inland waterway transport would compound the damage. France, which has been repeatedly battered by heat waves, could see its GDP shrink by 1.4 percent, pushing its annual growth rate to minus 0.6 percent, the report said.

German insurer Allianz had previously estimated that just two weeks of heat waves in June shaved 0.3 percent off European GDP.

The Rhine River, which handles about 80 percent of Germany's inland waterway freight, is drying up so severely that it may effectively split into two separate navigable sections within days.

Jens Schwanen, president of the German Inland Shipping Association (BDB), said Tuesday that water levels at the Kaub gauge station were expected to fall to a single digit for the first time this week. "In that case, the entire Rhine can no longer be navigated as one stretch — it would effectively be divided into two sections," he said.

Kaub, a stretch of the middle Rhine between Koblenz and Mainz, has long been identified as a major bottleneck due to its naturally shallow waters.

The disruption is raising alarms not only for industrial areas upstream such as Ludwigshafen but also for landlocked Switzerland, which relies on Rhine shipping for about 10 percent of its trade.

Swiss public broadcaster SRF said that if the Rhine were cut off midway, rerouting cargo by truck or train would be costly, and that oversized machinery and chemicals could not in principle be transported by road.

The Rhine is not alone — most rivers across Europe are suffering from severe drought.

An analysis of Copernicus data, from the EU's climate change monitoring service, found that as of last month, flow levels on 85 percent of the Rhine, 95 percent of Britain's Thames and two-thirds of the Danube — which crosses 10 European countries — had fallen to their lowest levels on record, AFP reported.

Drought was observed across 95 percent of mainland France and 99 percent of Switzerland last month, while Hungary, Slovenia and Austria recorded their worst July droughts on record, AFP added.

According to France's meteorological service, rainfall last month was about 70 percent below normal, making it the third-driest July on record. The government said roughly 70 percent of the country's territory is under water-use restrictions.

England's Environment Agency said 71.3 percent of the region is in drought and that water use has been restricted for about 27 million residents.


mokiya@heraldcorp.com