Wednesday, April 29, 2009

The economic impact of the new "Swine 'Flu"

According to well-placed sources, the next 48 hours will be critical in the spread of this particular 'Flu, and we should know within the next 2-3 weeks whether we have succeeded in averting a full-blown medical crisis related to it.

Perhaps it will be as late as October before a vaccine is available against the virus.

Meanwhile, as a general precaution against ALL viruses, please turn to my Medical Blog at and take the traditional Indian recipe against all 'flu type infections indicated there.

From a financial or business perspective, an interesting question is: what will be the economic impact of this 'Flu if it does develop into a full-blown pandemic?

My interlocutor suggests a fall of 1% in global GDP. This is just above the estimate from Moody’s, in a research note on Tuesday, that the global macroeconomic impact of a "mild" flu pandemic could cost 1.4m lives and reduce global gross domestic product by 0.8 per cent or $330bn.

In normal times, I would agree with those sorts of figures.

However, in the present delicate situation for the global is hard to tell if research notes such as from Moody's are of any value.

If there is indeed a pandemic which kills anything like 1.4 million people, Moody's may consider that "mild" but that could deal a blow to the effectiveness of all the current misguided governmental and inter-governmental attempts to counter the present economic crisis - efforts which have nevertheless at least so far kept the global economy from decelerating too quickly.

For all our sakes, but particularly for the sake of the poor in the world, pray hard that the virus is contained. Even a 0.8% further fall in global GDP would come hard on top of the already deplorable situation. Sphere: Related Content

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