Swine flu threatens prospects of global economic recoveryApril 28th, 2009 - 5:59 pm ICT by IANS
Washington, April 28 (IANS) The outbreak and spread of swine flu has come at a time when the global economy is trying to come out of the worst downturn since World War II and has threatened chances of an early recovery, especially in the US.
In recent weeks, economic data suggested a bottoming-out of the global financial crisis, but economists Monday were forced to consider worst-case scenarios in which the recession could become two or three times as painful, the Washington Post reported Tuesday.
That would be the result of a full-blown flu pandemic though economic difficulties are likely to deepen even if the outbreak were to remain relatively contained.
“The impact is to threaten the stabilisation of the global downturn we’ve been seeing over the last few weeks,” Brian Dolan, chief currency strategist for Forex.com, was quoted as saying. “The timing could not be worse.”
The swine flu spread could hit the already ailing tourism and airline industries the hardest as a number of nations have warned their citizens to avoid unnecessary travel to parts of North America.
It is also affecting trade - though trade barriers are already going up due to the dlobal downturn.
Russia, China and the Philippines, citing swine flu, suspended pork imports from Mexico and some US states where the virus has been detected, despite the fact that health officials say there is no link between pork consumption and the virus, the Post reported.
The swine flu impact in the US would be far greater in the case of a larger-scale pandemic.
A Congressional Budget Office report of 2006 estimated a pandemic, depending on its severity, could cost the country between 1 percent to 4.1 percent of annual economic output. Considering that the US economy is expected to shrink by 2.8 percent this year, a pandemic could lead to a contraction of 3.9 percent to 6.9 percent as consumer demand and worker productivity suffer further, the Post said.
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