A few days ago, I asked ChatGPT to build me an “economic radar.”

The idea was simple: monitor the Saudi Exchange, government bodies, economic platforms, and a number of accounts focused on the market throughout the day, then tell me every hour what was worth paying attention to.

I wanted it to pick up a company disclosure, an economic decision, a new figure, or a topic investors had started discussing.

But in one of the updates, something I hadn’t expected appeared:

Weather forecasts.

The radar flagged a report from the National Center for Meteorology forecasting above-average rainfall across wide parts of the Kingdom during October and November, alongside higher-than-usual temperatures. According to the center, the probability of above-average rainfall in October reaches 80% across most regions of the Kingdom, while average temperatures in some areas could be around 3 degrees Celsius above normal for the month.

My first reaction was more or less: what does this have to do with an economic radar?

Then came the more intriguing question:

Is weather actually an economic variable?

First... what exactly is an “economic variable”?

Simply put, an economic variable is something that can affect the behavior of the economy: production, prices, consumption, jobs, business costs, or investment decisions.

The interest rate is an economic variable.

The oil price is an economic variable.

Income, unemployment, and inflation are economic variables.

But rain? And heat?

We might not usually put them next to interest rates on the same screen, but their effects can reach the economy through many different channels.

Notably, the National Center for Meteorology itself explains that seasonal forecasts are not used only to find out whether we should carry an umbrella; they also provide useful information for sectors including agriculture, energy, water management, public health, and disaster preparedness.

And that’s where the economic story begins.

When temperatures rise... productivity may fall

Imagine a worker doing physical labor outdoors, a facility operating in extreme heat, or a company whose need for cooling has risen sharply.

Heat here is no longer just a weather condition.

It has become a cost.

Research by the International Monetary Fund indicates that rising temperatures in hot-climate economies can affect output through several channels, including lower agricultural production, reduced productivity among workers exposed to heat, and impacts on health and investment.

And this isn’t just theoretical.

In a recent World Bank report on firms in the Middle East, North Africa, Afghanistan, and Pakistan, the bank found that around three in ten firms operate in extreme heat for more than 100 days a year. The report links roughly 17 additional days of extreme heat per year to an almost 6% decline in sales, a 4% decline in labor productivity, and an 8% decline in wages in the sample it studied.

In other words, temperature may ultimately show up in a company’s income statement.

And rain can affect the price of a product

Suppose heavy rain slows truck traffic along a route.

Raw materials may be delayed.

Production is delayed.

Transport costs rise.

And the company may have to find an alternative supplier or route.

In the end, some of these costs may show up in the price of the product consumers buy.

This is one of the channels economists examine when discussing the relationship between weather and inflation.

An International Monetary Fund study found that weather disruptions can put pressure on supply chains, raise transport and production costs, and then pass those pressures on to prices. Extreme heat can also increase energy demand, which may in turn create additional cost effects for other economic activities.

And so a story can begin with a cloud and end with a bill.

Agriculture is the easiest example... but not the only one

It’s easy to understand the relationship between weather and agriculture.

Rainfall, temperatures, and humidity affect crops and production.

When production of an agricultural commodity falls in a large country or region, supply may shrink and prices may rise.

But it’s no longer accurate to think that weather affects only farmers.

Weather can affect:

A delivery company whose order volumes and delivery times change.

A construction company that has to pause some outdoor work.

An airline dealing with operational disruptions.

A store whose customer traffic changes.

An electricity company facing higher demand during a heatwave.

An insurance company dealing with more claims after a severe weather event.

Even a restaurant may find that customers’ ordering patterns have changed because of a rainy evening.

Each of these examples is small on its own, but when the same effect reaches thousands of businesses and millions of consumers, we begin to move from weather to the economy.

Even what we buy changes with the weather

Weather affects not only supply, but demand as well.

A very hot day may increase demand for air conditioners, cold drinks, and delivery services.

Rain may reduce interest in one activity while increasing demand for another.

Weather thus becomes part of the data companies can use to plan inventory, staffing, delivery, and marketing.

For a company, knowing the temperature forecast is not always less important than knowing what its competitors are doing.

But does this mean a rain forecast will move the stock market?

It’s not that simple.

And that’s an important point.

Not every change in the weather is an economically significant event, and not every weather report deserves to become financial news.

Economists generally care about three things:

The scale of the change, its duration, and the sector exposed to it.

Ordinary rain for a few hours may not mean much for the economy.

But a prolonged heatwave, an extended drought, floods that disrupt roads and infrastructure, or a major temperature shift across a wide area can have measurable effects.

It’s also important to distinguish between weather and climate.

Weather describes what happens over a relatively short period.

Climate describes patterns and trends over longer periods.

A weather event may create a temporary economic impact, while changes in climate patterns can alter investment decisions, infrastructure, production locations, crop types, and even entire business models.

And what does this have to do with Saudi Arabia?

That’s precisely why it no longer seemed strange to me to see a weather report on an “economic radar.”

The National Center for Meteorology is forecasting above-average rainfall across wide areas of the Kingdom during October and November 2026, along with higher average temperatures in October, November, and December.

These are not forecasts for GDP, and they don’t automatically mean higher inflation or lower corporate profits.

But they are potentially relevant economic information.

A logistics company may interpret them one way.

An insurance company another way.

The agricultural sector a third way.

And a company whose operations depend on outdoor work may read them in an entirely different way.

That’s the point.

Maybe our idea of an economic radar was the problem

When I asked ChatGPT to monitor the economy, I expected it to bring me what we’re used to calling “economic”: stocks, earnings, oil prices, government decisions, and indicators.

But the economy is, in reality, broader than a trading screen.

It is the study of how people and businesses make decisions in a world with limited resources and changing conditions.

And weather is one of those conditions.

So perhaps the question wasn’t:

Why did ChatGPT put the weather on my economic radar?

But rather:

Why was I surprised to see it there in the first place?

Because when rain affects a truck’s route, heat lowers a worker’s productivity, a heatwave increases electricity consumption, or drought reduces an agricultural harvest, we’re no longer talking about weather alone.

We’re talking about production, costs, prices, income, and profit.

And that, ultimately, is the language of economics.