Heat Stress Could Cost Ethiopia USD33.3bn in Annual GDP by 2040: ILO Warns

Rising temperatures could cost Ethiopia an estimated USD 33.3 billion in annual gross domestic product by 2040 through reduced labor productivity, according to a new study by the International Labour Organization (ILO), which warns that heat exposure is already adversely impacting employment and economic output. The projected loss is based on a low-emissions scenario and represents the potential annual economic impact over the next decade and a half. Among the six countries examined in the ILO research—which also covers Ghana, Lebanon, the Maldives, Senegal, and Sri Lanka—Ethiopia recorded the highest projected GDP loss. Released on Thursday, the study estimates that annual GDP losses across the six nations will range from USD 575.5 million in the Maldives to USD 33.3 billion in Ethiopia by 2040 under a low-emissions pathway. These economic projections rise substantially under high-emissions scenarios. By 2060, annual GDP losses in Ethiopia could range from USD 79.4 billion to as high as USD 310.3 billion, depending on the emissions pathway. The employment impact is projected to scale similarly. Under the low-emissions scenario, Ethiopia could lose the equivalent of 1.78 million full-time jobs annually by 2040. By 2060, these losses could reach between five million and six million full-time-equivalent jobs under high-emissions scenarios. These figures represent working-time losses converted into full-time-equivalent jobs rather than direct layoffs. The study examines how rising temperatures impair workers’ health, safety, and productivity, identifying agriculture, construction, fisheries, and transport as particularly vulnerable due to their reliance on outdoor and physically demanding labor. The research also underscores how national climate conditions, employment structures, and adaptive capacities shape the scale of heat-related economic damage. Andreas Floris, lead author of the study, noted that every industry and workplace stands to benefit from proactive adaptation to heat stress. Commissioned with support from the Climate Vulnerable Forum and the Vulnerable 20 Finance Ministers (CVF-V20)—with funding provided via the CVF-V20 Joint Multi-Donor Fund—the research provides critical baselines on how heat stress affects national economies. When compared across the six study countries, Ethiopia’s projected economic loss is indeed the highest in absolute dollar terms, driven largely by its vast labor force and heavy reliance on agriculture and outdoor labor-intensive sectors. By comparison, projected annual GDP losses reach USD 26 billion in Sri Lanka, USD 23.2 billion in Ghana, USD 10.5 billion in Senegal, USD 2.6 billion in Lebanon, and USD 575.5 million in the Maldives. While nations face heavy structural exposure, experts emphasize that countries can significantly reduce these losses through targeted adaptation mechanisms. Exemplary nations and international frameworks highlight several effective techniques to build resilience, including enhanced occupational safety and health interventions such as mandatory rest breaks during peak heat hours, providing shaded rest areas, and modifying work schedules in sectors like construction and agriculture. Additional measures involve expanding social protection systems and climate-resilient social safety nets to support informal and outdoor workers whose incomes fluctuate or halt during extreme heatwaves, leveraging inclusive social dialogue—similar to frameworks utilized in countries like Senegal—to design practical, localized workplace heat-mitigation policies, and integrating heat stress projections into national macro-fiscal policies, infrastructure design, and sectoral development goals to cushion productivity shocks. To mitigate these impacts broadly, the ILO has emphasized that protecting workers from rising temperatures must be treated as a fundamental investment in human health and long-term economic resilience. As Marlene Attallah, deputy director-general at Lebanon’s Ministry of Labour, noted, safeguarding workers directly preserves productivity and working conditions.