Climate Change: Drastic GDP Losses for Hungary, CEE

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Global warming will not only wreak havoc on the global economy but could also result in dire economic consequences for Hungary and other countries in Central & Eastern Europe. G7 economies, for example, could lose USD 5 trillion a year, or 8.5% of their GDP by 2050, if global average temperatures rise by 2.6 degrees Celsius compared to pre-industrial levels, according to a joint analysis by Oxfam and the Swiss Re Institute. The organizations contend that economic decline will be twice as much as the one suffered during the Covid-19 pandemic.

Within this scenario, Hungary’s GDP will shrink by 8.5% by 2050. In a less pessimistic case, if global temperatures rise by only 1.5 degrees Celsius, a 3% GDP loss is to be expected in Hungary (while the global economy will shrink by 4.2%). The study also looked at the worst-case scenario, if no efforts to battle climate change are made by countries. In that case, the average temperature would increase by 3.2 degrees Celsius, which would lead to a global GDP decline of 18.1% and make for an 11.4% downturn for Hungary.

Sources: Menedzsment Forum, Guardian

CET Editor

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