{"id":15995,"date":"2026-08-25T09:56:40","date_gmt":"2026-08-25T06:56:40","guid":{"rendered":"https:\/\/newsfire.gr\/en\/?p=15995"},"modified":"2026-08-25T09:56:40","modified_gmt":"2026-08-25T06:56:40","slug":"drought-and-heat-threaten-cyprus-tourism-and-agriculture","status":"publish","type":"post","link":"https:\/\/newsfire.gr\/en\/drought-and-heat-threaten-cyprus-tourism-and-agriculture\/","title":{"rendered":"Drought and Heat Threaten Cyprus Tourism and Agriculture"},"content":{"rendered":"

In a new analysis examining the effects of extreme weather during the summer of 2026, Morningstar DBRS<\/strong> reported that successive heatwaves and below-average rainfall have produced widespread drought conditions and intensified existing water shortages across parts of the continent, according to Kyriacos Nicolaou<\/strong> writing in Cyprus Mail<\/em>.<\/p>\n

The ratings agency warned that droughts are becoming more frequent and severe globally, while research into the economic effects of extreme weather and natural disasters increasingly shows that drought is causing substantial financial damage.<\/p>\n

Across Europe, severe drought is affecting agriculture, inland waterways, industry and energy generation, with disruptions potentially spreading through wider economic activity.<\/p>\n

Credit Risk Remains Manageable for Now<\/h2>\n

Morningstar DBRS said the consequences for the creditworthiness of most sovereigns it rates remained limited for now, as the costs faced by governments were considered manageable. However, the agency warned that the long-term economic consequences of physical climate risks will depend heavily on adaptation efforts, as well as on how climate change and weather patterns develop.<\/p>\n

Adriana Alvarado<\/strong>, Senior Vice-President in Morningstar DBRS’ Sovereign Ratings Group, said climate change adaptation and preparedness should keep pace with the intensity and frequency of climate risks. She explained that when examining creditworthiness impacts, the agency assesses whether climate change and adverse weather events could destroy a significant part of national wealth, weaken the financial system or disrupt the economy.<\/p>\n

Cyprus Faces Cumulative Losses of \u20ac162 Billion by 2100<\/h2>\n

For Cyprus, the warning comes against a backdrop of high exposure to physical climate risks, particularly through water availability, agriculture and tourism.<\/p>\n

A previous study by the Economics Research Centre of the University of Cyprus estimated that cumulative discounted GDP losses under a business-as-usual climate scenario could reach approximately \u20ac29 billion by 2050, rising to \u20ac162 billion by 2100.<\/p>\n

The research identified tourism, financial services and agriculture among the sectors particularly vulnerable to climate change.<\/p>\n

Under its business-as-usual scenario, the study estimated tourism losses of about \u20ac3.8 billion by 2050, compared with \u20ac2.4 billion under a middle-of-the-road scenario and \u20ac500 million under a sustainability scenario.<\/p>\n

Agriculture was projected to face GDP losses of \u20ac500 million under the business-as-usual scenario, \u20ac250 million under the middle-of-the-road scenario and \u20ac60 million under the sustainability scenario.<\/p>\n

Water Scarcity Threatens Core Economic Model<\/h2>\n

The figures underline why drought is more than an environmental concern for Cyprus, where limited water resources and prolonged hot, dry periods can directly affect agricultural production and increase pressure on water infrastructure.<\/p>\n

Tourism is also exposed as rising temperatures and more frequent extreme weather begin to challenge the traditional Mediterranean summer model.<\/p>\n

Nejc Jus<\/strong>, Research Director at the World Travel and Tourism Council, said earlier this year that climate, quality and digital data will determine tourism development over the next five years. He warned that climate adaptation would become critical as extreme heat reshaped seasonal travel patterns.<\/p>\n

Jus said destinations would need to extend shoulder seasons or risk losing visitors during the hottest part of the summer. For Cyprus, that potentially creates a challenge for a tourism model that remains heavily concentrated in the warmer months.<\/p>\n

Fiscal Council Warns Investment Falls Short<\/h2>\n

At the same time, the country has been under pressure to increase investment in climate adaptation and mitigation. Cyprus’ Fiscal Council has previously warned that spending to address climate risks remained well below what was required, highlighting the country’s high sensitivity and exposure to physical climate change.<\/p>\n

The council argued that the cost of inaction could be considerably higher than the cost of investment, with implications for public finances, households and businesses.<\/p>\n

It also warned that climate risks could increasingly feed into financial and credit risks, potentially affecting businesses’ borrowing costs and, ultimately, the country’s credit ratings.<\/p>\n

Private Sector Makes Progress on Sustainability<\/h2>\n

Meanwhile, Cyprus has made some progress in the private sector towards addressing climate-related risks. More than 1,200 Cypriot companies had completed sustainability assessments through the Synesgy platform under an interbank ESG project, with small and medium-sized enterprises accounting for 90 per cent of the businesses assessed.<\/p>\n

With information from Cyprus Mail<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

A credit ratings agency warns that drought conditions threaten Europe’s economy, with Cyprus facing potential cumulative losses of \u20ac162 billion by 2100 due to water scarcity affecting agriculture and tourism.<\/p>\n","protected":false},"author":39,"featured_media":15994,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[122],"tags":[8248,213,7783,10871,12275,6882,12274],"nfg_topic":[134],"class_list":["post-15995","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-agriculture","tag-cyprus","tag-drought","tag-heatwaves","tag-morningstar-dbrs","tag-tourism","tag-water-scarcity","nfg_topic-europe"],"_links":{"self":[{"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/posts\/15995","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/users\/39"}],"replies":[{"embeddable":true,"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/comments?post=15995"}],"version-history":[{"count":1,"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/posts\/15995\/revisions"}],"predecessor-version":[{"id":15998,"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/posts\/15995\/revisions\/15998"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/media\/15994"}],"wp:attachment":[{"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/media?parent=15995"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/categories?post=15995"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/tags?post=15995"},{"taxonomy":"nfg_topic","embeddable":true,"href":"https:\/\/newsfire.gr\/en\/wp-json\/wp\/v2\/nfg_topic?post=15995"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}