Further droughts could cost country 1.6 percent of GDP, scientists warn


New research by scientists from the Water, Soil and Landscape Centre at the Czech University of Life Sciences suggests that another long-term spell of drought would result in an CZK 80 billion contraction of the Czech economy. Aside from financial effects, drought would also have an impact on population health and the environment. At a press conference on Wednesday the team suggested spending CZK 25 billion annually on preventative measures.

Researchers presented two scenarios of how the economy could be impacted by further droughts.

One scenario envisions a 25 percent decrease in the productivity of industries, such as textile or paper production, which are dependent on water supplies. In this case the economy would face a production capability decline between 0.9 to 1.6 percent of GDP.

The second scenario, counts on a 50 percent decrease that would cut production down by 2.8 to 4.8 percent of GDP.