14.08.2026, Paris.
The anomalous heat and wildfires that have swept across France this summer have dealt a serious blow to the country’s economy. According to preliminary estimates, total economic damage could amount to between €3 billion and €6 billion. However, this estimate varies depending on the methodology used for calculating the losses.
The rating agency Morningstar DBRS gives a higher figure up to €15 billion in total losses for France, while the Financial Times estimates the damage from fires in the five worst-affected EU countries at €3.1 billion, largely due to the costs of restoring burned areas.
The fires have dealt a serious blow to the economies of entire regions. The Gironde department, an important center for the defense and aerospace industries, has been particularly affected.
Major companies such as Safran (an aircraft engine manufacturer), Dassault Aviation (aircraft manufacturing), and ArianeGroup (rocket manufacturing) were forced to suspend production and evacuate personnel.
According to the Gironde Chamber of Commerce and Industry, the fires directly affected at least 40,000 companies, of which 19,500 temporarily ceased operations.
Between 120,000 and 150,000 employees were enrolled in government employment-support programs as a result of production shutdowns.
Unplanned spending on eliminating the consequences of the disaster will place a heavy burden on the state budget, making it more difficult for the government to implement its plans to reduce the deficit. Insurers will cover part of the losses, but a significant portion will fall on the state, putting at risk the goal of reducing the budget deficit from 5.1% to 5% of GDP.
France’s economy minister acknowledged that achieving the deficit targets would be difficult, particularly against the backdrop of other crises, such as rising energy prices. The International Monetary Fund (IMF) forecasts that France’s budget deficit could rise to 5.2% of GDP by the end of the year.
The insurance industry is also facing challenges caused by climate change. Unlike floods and droughts, wildfires in France are not covered by the state disaster-compensation system, meaning that private insurers will bear most of the costs. Experts warn that insurance premiums will rise in high-risk areas, potentially making living in some regions extremely expensive.
There is what is known as a “protection gap”, the difference between total losses from disasters and the amount covered by insurance. In Europe, this gap is widening as climate-related disasters become more frequent and intense.
Analysts view extreme heat not only as a climate issue but also as a serious economic phenomenon. Estimates indicate that summer heat waves, droughts, and floods in Europe have resulted in losses equivalent to approximately 0.3% of the region’s economic output. In the long term, cumulative losses could rise to 0.8%.
In addition to direct damage, there are indirect losses: reduced labor productivity due to heat, disruptions to supply chains, and declining tourism revenues.
Experts warn that climate disasters could become a new source of inflation in Europe due to rising costs for goods, services, and reconstruction work.
In addition, the fires led to large-scale population evacuations. According to various estimates, at the height of the crisis, between 220,000 and 250,000 people were forced to leave their homes and vacation destinations.
The main impact was felt in the southwest of the country, particularly in the Gironde and Landes departments. According to the French Interior Ministry, at least 167,000 people were evacuated in Gironde, while another 57,000 residents were evacuated from the region in a single night. In the Landes department, the number of evacuees reached at least 23,000.
The evacuations took place under extremely difficult conditions. Residents and tourists were evacuated not only by road but also by water, by ferries across the Arcachon Basin, when the flames approached the popular Cap Ferret peninsula. At the height of the crisis, on July 23, approximately 67,000 people were evacuated from two disaster zones alone. During the peak period, evacuations affected 23 municipalities, and by the end of July, after the giant fire in Gironde, which destroyed 42,000 hectares of forest, had been brought under control, most of the approximately 224,000 evacuees were able to return home.
These figures provide a comprehensive view of the problem, encompassing not only direct losses but also the budgetary, industrial, social, and insurance-related aspects of the crisis.
Source: Rossa Primavera News Agency
