According to the Global Macroeconomic Consequences of Pandemic Influenza report by the Lowy Institute for International Policy, it is estimated that even a mild influenza pandemic would result in the deaths of 1.4 million people and would cost the global economy 0.8 percent of gross domestic product (GDP) — approximately $330 billion — in lost economic output. The report estimates that a severe influenza pandemic would result in a loss of $4.4 trillion in global GDP and a 12.6 percent contraction in the economy. In the case of a severe pandemic, the report also foresaw that 142.2 million people would die of influenza and that some economies, particularly in the developing world, would shrink by more than 50 percent.
The worst-case scenario for a possible flu pandemic unveiled by the World Bank last year predicted a cost of $3 trillion to the global economy or a 4.8 percent shrinkage. It is predicted that a pandemic would kill some 70 million people, according to the scenario.
SARS: $40 billion loss in Asia-Pacific economies
Spreading from China and rapidly infecting individuals in 37 countries around the world in 2003, severe acute respiratory syndrome (SARS) killed 775 people from 25 countries and caused a total loss of $40 billion to the economies of the Asia-Pacific region. On March 12, 2003, the World Health Organization (WHO) issued a global alert and advised against travel to the areas where the pandemic was most severe. The alert was lifted in June 2003. The countries which suffered the most as a result of the WHO advisory were Singapore, Hong Kong, China and Malaysia, which experienced a decline in tourism revenue. The Asian Development Bank (ADB) disclosed the decline in the number of tourists visiting those countries most affected by the pandemic as between 20 and 70 percent and 15 to 35 percent in other countries in the region. The decrease in tourism revenue was reported by the bank to be approximately $15 billion.
The economies of Singapore and Hong Kong contracted by 2 percent and 2.6 percent, respectively, in 2003. The pandemic also had a negative impact on several other countries, including Canada, South Africa, Sweden, France and the United States. As the spread of SARS lasted for only a quarter of a year, thanks to necessary measures taken by international organizations and governments, its effects on the markets remained limited.
According to the latest study by the Allianz Insurance Group and RWI Essen, an economic research institute, the swine flu virus will have less impact on Germany’s economy than previously expected. The study said swine flu would cost Europe’s biggest economy between 10 billion euros and 40 billion euros, equivalent to 0.4 percent and 1.6 percent of GDP, respectively, depending on the gravity of the global flu pandemic. The transport, hospitality and cultural sectors would suffer the most, said the study.
“The fact is that companies will suffer from the new flu less in the current difficult economic situation than in a boom,” said Christoph Schmidt, the president of the RWI Essen. “In a crisis, companies have fewer orders, so when employees fall sick, it doesn’t matter as much.”
According to the study, a nationwide vaccination program against swine flu would reduce the negative impact on GDP. Germany recorded its first known death from the swine flu virus this month.