In a new blog post, the Bank of France estimates that heatwaves and drought will reduce France’s annual gross domestic product (GDP) growth by around 0.1 percentage point in 2026, mainly through losses in agriculture. The aggregate impact on sectors covered by its Monthly Business Survey (MBS) is smaller, reflecting adjustments to operations, scope to recover lost production and shifts in demand between activities. Agricultural value added is projected to fall by 6% in 2026, with preliminary crop estimates showing sharp yield declines, particularly for maize and fodder crops. Agriculture is excluded from the MBS and therefore assessed separately. Food producers reported livestock deaths and early depletion of fodder stocks, raising the prospect of further production declines or shortages in autumn and winter, with potential effects on prices. For context, the bank’s September 2026 macroeconomic projections forecast annual GDP growth of 0.4%. For sectors covered by the survey and included in its forecasting models, the estimated drag on quarterly GDP growth was 0.01 percentage point in the second quarter and 0.03 percentage point in the third. Accommodation and food services and food manufacturing were the worst affected survey sectors. Manufacturing and construction firms adjusted working hours or temporarily suspended operations, but many planned to recover lost output. Weaker tourism demand contrasted with increased demand for beverages and air conditioning installation. The GDP estimates do not capture the full economic cost of extreme weather, including damage to natural and physical assets from wildfires.

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