Swine flu to influence world economy slightly: experts
Azerbaijan, Baku, April 29 / Trend , A.Badalova/
The outbreak of swine flu in Mexico and expansion of the virus in other countries arises many issues on its influence on the world economy.
The worst scenario by the World Bank suggests that the swine flu epidemic may cost $3 trillion to the world economy and could lead to a decline in global GDP by five percent. According to the medium scenario, the world economy will fall by two percent or $1.2 trillion. At the same time, about 60 percent of the losses are the result of lower demand due to reduction in the number of trips, costs less than the necessary purchases, and about 30 percent of losses are the result of illness and worker absenteeism.
Experts believe that the virus is not so terrible and will have a slight influence on the world economy.
"For a start, swine flu appears to respond well to treatment using existing drugs. Admittedly, the disease is believed to have killed more than 100 people in Mexico itself, but the health care system there is relatively poor," the British Capital Economics Consulting Company on Economy Researches Julian Jessop told Trend .
The world is now much better prepared to deal with these sorts of crises, thanks to the experience of SARS and the persistent threat of avian flu, Jessop said.
The main economic damage has typically come from panic measures to control a potential pandemic rather than direct impact of the disease itself. In the current outbreak the wider fall-out has been limited, Jessop added.
Even the World Health Organisation, which has declared a "Public Health Emergency of International Concern", is not recommending any travel or trade restrictions in response to swine flu.
Analysts of the British company are expecting the world business activity will recover shortly.
The actual impact of the flu on energy markets is difficult at the moment considering how little is known about the flu strain involved and the extent of the outbreak. While the global spread of the swine flu would almost certainly have a negative impact on global transport, trade and ultimately energy consumption, it must be remembered that the global recession has already taken a severe toll on oil demand, an analyst in one of the largest American banks JPMorgan Kristi Jones told Trend .
Preliminary data show global oil demand has fallen 3.4 percent (a nearly 3.0 mbd contraction) in the first quarter and a 5.2 percent contraction in Mexico specifically.
The SARS epidemic occurred at the beginning of a period of rapid economic growth in Asia and oil demand in the region rebounded practically unscathed later in the year. For the moment, the initial flu news has created the specter of a potentially globally economic depressing event just as the markets were evaluating the prospects for economic recovery. An event of legitimate severity would be bearish for both crude and transportation fuel prices, Jones said.Do you have any feedback? Contact our journalist at: [email protected]