Economic costs of a flu pandemic

Economic costs of a flu pandemic

(Reuters) - A new strain of flu has killed up to 68 people in Mexico and infected eight in the United States.

Although health officials have stopped short of declaring a pandemic, they expect to find more cases as the flu was spreading between people.
The severity and mortality rate of this new strain has not yet been scientifically established.

However, health experts have long warned that the next flu pandemic was overdue and urged countries around the world to prepare for the dramatic economic impact of such a catastrophe.

Below are estimates of economic costs of such a disaster:

* The World Bank estimated in 2008 that a flu pandemic could cost $3 trillion and result in a nearly 5 percent drop in world gross domestic product. The World Bank has estimated that more than 70 million people could die worldwide in a severe pandemic.

* Australian independent think-tank Lowy Institute for International Policy estimated in 2006 that in the worst-case scenario, a flu pandemic could wipe $4.4 trillion off global economic output.

* Two reports in the United States in 2005 estimated that a flu pandemic could cause a serious recession of the U.S. economy, with immediate costs of between $500 billion and $675 billion.

One report, from the Congressional Budget Office, said hospitals would have difficulty controlling infection and might become sources for spreading the illness.

A second report by New Jersey-based WBB Securities LLC predicted a one-year economic loss of $488 billion and a permanent economic loss of $1.4 trillion to the U.S. economy.

* SARS in 2003 disrupted travel, trade and the workplace and cost the Asia Pacific region $40 billion. It lasted for six months, killing 775 of the 8,000 people it infected in 25 countries.