CIAO DATE: 11/2009
June 2009
Health experts agree that, while the current flu epidemic that started in Mexico in April 2009 may weaken during the summer, it could re-appear in the autumn, possibly in a stronger form. Using historical benchmarks of previous flu pandemics and of the SARS episode, we estimate the economic impact of a global flu pandemic. We estimate that world GDP would be cut by around US$2.5trillion in the six months of the pandemic or 3.5% of 2009 GDP. That a pandemic is likely to hit the world economy just as it starts to recover from recession could result in the economic impact being larger than would otherwise have been the case, and this could tip the global economy into deflation.
Resource link: Could swine flu tip the world into deflation? [PDF] - 124K