Flu pandemic 'could cause losses of $800bn'

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The Independent Online

A human flu pandemic could wipe $800bn (£460bn) off world economic growth, the World Bank warned yesterday, as health officials from 100 countries met to hammer out a strategy to control the spread of the avian flu virus. In a report on the bird flu threat, the bank said a 2 per cent loss of global GDP during a flu pandemic would represent $200bn in losses in one quarter or $800bn over a year.

The report said a previous study on flu pandemics had suggested a new outbreak could cause 100,000-200,000 human deaths in the US, which it said translated into economic losses for the country of $100-$200bn. "If we extrapolate from the US to all high-income countries, there could be a present-value loss of $550bn," it said. The rep-ort examined the outbreak of Sars in east Asia in the second quarter of 2003, which is believed to have infected 8,000 people, killing 800 and costing the regional economy $18bn. "A flu pandemic could be substantially more damaging in human and economic terms."

The World Health Organisation (WHO) estimates 2-7 million people could die, while other estimates exceed 100 million deaths. The World Bank looked at a mild scenario which assumed a short-lived psychological impact, and a worst-case scenario in which the psychological impact lasted longer and affected demand for four quarters. It included severe demand shocks for services sectors and disruption to businesses as staff were laid low. "Here, the economic impact would be more severe and would likely force the world into a recession," it said.

Milan Brahmbhatt, the bank's lead economist in its east Asia and Pacific region, said the $10bn in lost trade already attributable to avian flu would be dwarfed should the virus jump between people and mutate.

Lee Jong-Wook, the director general of the WHO, has said it is just a matter of time before an avian flu virus acquires the ability to be transmitted from human to human.But financial analysts have played down some more alarmist projections.