Six Southeast Asian cities face high climate risk by 2040s with 25% GDP loss projected by 2050

Southeast Asian cities are increasingly exposed to the escalating risks of flooding and heatwaves, driven by climate change. Recent modelling by Zurich Resilience Solutions highlights that six major cities—Singapore, Bangkok, Ho Chi Minh City, Jakarta, Kuala Lumpur, and Manila—face at least a "high risk" of extreme weather events, including heavy precipitation, rising sea levels, and heatwaves, by the 2040s. The analysis focused on key infrastructure such as seaports, airports, and cultural landmarks, assessing their vulnerability under the SSP2-4.5 climate scenario, which projects a global temperature rise of approximately two degrees Celsius by 2060 [1].

Manila, Bangkok, Singapore, and Jakarta are identified as particularly at risk, with critical infrastructure facing significant exposure to multiple climate hazards. In Manila, the combination of extreme precipitation, storm surges, and sea level rise threatens trade and cultural preservation. Both Bangkok and Jakarta are also at heightened risk of worsening flooding, given their geographic locations and already existing challenges with water management [1].

The potential economic consequences of inaction are severe. A joint report from the World Economic Forum and the Singapore International Foundation estimates that climate change could reduce Southeast Asia’s GDP by up to 25% by 2050. Additionally, a study from Oxford Economics suggests that a 1% increase in average temperatures could raise food prices across several countries in the region, compounding economic and social pressures [1].

Governments are beginning to respond, with Singapore recently allocating an additional 5 billion Singapore dollars to its coastal and flood protection fund, supporting infrastructure like detention tanks and elevated platforms. Meanwhile, Ho Chi Minh City is upgrading its drainage systems and expanding green urban spaces to mitigate local flooding [1].

Private sector players are also recognizing the financial risks. City Developments Limited (CDL), listed at No. 139 on the Southeast Asia 500, projected in 2023 that climate inaction could cost it 120 million Singapore dollars by 2030—nearly 4% of its 2024 revenue. The company is currently working on a new climate scenario study to be released later this year [1].

The compounding effects of climate change are not limited to infrastructure and finance. Agricultural systems, particularly rice production, are under threat from compound drought–heatwave events. These could drastically reduce rice yields by the end of the 21st century, jeopardizing food security and economic stability in the region [2]. Given the cultural and dietary significance of rice in Southeast Asia, such declines could trigger price volatility and increase poverty levels [3].

Efforts to enhance resilience are ongoing but remain inconsistent. The concept of “sponge cities,” designed to improve urban water absorption and retention, is being explored in cities like Bangkok. However, broader policy frameworks and implementation strategies are still lacking. As extreme weather events become more frequent and intense, Southeast Asian cities must accelerate their adaptation efforts to reduce climate risk exposure and build long-term resilience [4].

Source: [1] Fortune, Southeast Asia’s cities at ‘high risk’ of flooding and heatwaves, thanks to climate change, https://fortune.com/asia/2025/08/11/southeast-asia-cities-high-risk-flooding-heatwaves-zurich-resilience/

[2] Atmospheric Research, Rice yields in south-east Asia will “drop sharply” by the end of the 21st century due to an increase in compound drought-heatwave events, https://www.researchgate.net/publication/394372330_Compound_drought-heatwave_events_accelerate_the_potential_risk_on_rice_yield_over_Southeast_Asia

[3] Carbon Brief Daily Briefing, As many as 13 critical minerals for low-carbon energy may face shortages under 2C pathways, https://www.carbonbrief.org/daily-brief/california-wildfires-renewables-cut-chinese-prices-lulas-veto/

[4] Yahoo, For Bangkok, a city of 11 million sitting on low-lying swampland, the management of its water has increasingly become a matter of survival, https://uk.news.yahoo.com/l-look-sponge-cities-solve-100000543.html