Extreme heat takes toll on Bangladesh economy

Bangladesh is facing mounting economic risks from climate-driven extreme heat, with workers expected to lose the equivalent of nearly 24 working days a year by 2030, while households grapple with soaring healthcare costs and shrinking incomes, according to a new global report.

The report, “Heat, Health and the Increasing Costs of Living – A Call for Action”, released on Sunday by adelphi global, identifies Bangladesh as one of the countries most vulnerable to the combined financial impacts of rising temperatures.

Alongside India and Nigeria, Bangladesh faces particularly high risks due to widespread informal employment, escalating out-of-pocket healthcare costs and limited social protection.

The study is the first to examine how climate-induced heat simultaneously affects household incomes and living costs across eight countries — Bangladesh, Brazil, France, India, Indonesia, Italy, Nigeria and South Africa.

According to the report, workers in Bangladesh’s agriculture and construction sectors are projected to lose the equivalent of 23.75 working days annually by 2030 as a result of heat stress.

Working-hour losses in these sectors are expected to increase from 6.28 per cent at present to 9.58 per cent by 2030, even under a low-emissions climate scenario.

Across all sectors, annual working-hour losses are forecast to rise from 4.24 per cent to 4.84 per cent, reducing earnings for millions of workers, particularly those employed in the informal economy who have little or no access to paid leave, health insurance or income protection.

The report also highlights Bangladesh’s heavy dependence on out-of-pocket healthcare spending.

In 2023, households directly financed 79.3 per cent of total health expenditure—one of the highest proportions among the countries covered by the study.

Annual per capita out-of-pocket healthcare spending has increased by more than 830 per cent since 2000, placing additional financial pressure on families already coping with climate-related income losses.

Up to 239 hot days a year
Bangladesh is expected to remain among the world’s most heat-exposed countries over the coming decades.

Between 2020 and 2039, most parts of the country are projected to face high to very high humidity-based heat risk, with 183 to 239 days each year recording temperatures above 30°C in many areas.

During severe heatwaves, productivity losses in some sectors could reach 50 per cent, posing an increasing threat to livelihoods and economic stability.

The report warns that these impacts are likely to be particularly severe because Bangladesh’s labour market is dominated by informal employment.

Nearly all women employed in agriculture work in the informal sector, while informal employment also remains widespread in construction and other heat-exposed industries.

Without adequate social protection, every hour of work lost directly translates into lost income.

$24 billion economic loss
Beyond its impact on households, extreme heat is imposing a growing burden on the wider economy.

According to the report, Bangladesh lost an estimated US$24 billion in labour income and productivity in 2024 due to extreme heat—equivalent to around 5 per cent of GDP.

Heatwave-related electricity shortages further compound the problem by exposing workers and households to unsafe indoor temperatures while limiting access to cooling.

Integrated policy response needed
The report argues that Bangladesh can no longer address climate adaptation, public health and labour protection as separate policy areas.

Instead, it calls for an integrated strategy that places people at the centre of the country’s climate adaptation agenda.

Its recommendations include strengthening public healthcare services to reduce out-of-pocket medical expenses, expanding social and labour protections for workers exposed to extreme heat, incorporating heat-related health risks into national climate adaptation plans, and mobilising climate finance to support healthcare and worker protection.

As heatwaves become more frequent and prolonged, the report concludes that safeguarding public health and protecting household incomes must become central pillars of Bangladesh’s climate adaptation and development strategy.