The Cost of Swine Flu
Can the epidemic take down global markets?
The media has been hyper-focused this weekend on the news that more than 1,000 people in Mexico have become infected with Swine flu, also known as Influenza A H1N1. Nearly 90 people have died from the outbreak. The strain appears to have spread to several countries including the United States. One of the most notable pieces of information about this outbreak is that in the US and Canada the cases have been described as “mild.”
One of the first things that accompany news of dangerous flu viruses is an economic evaluation of the effects of a pandemic. In a recent article, Reuters pointed out in 2008 that the IMF said a flu pandemic could cost $3 trillion and cause a 5% drop in global GDP. In other words, it would almost certainly turn the current deep recession into a worldwide depression.
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