IMF highlights the potential global economic and financial impact of an influenza pandemic

A report has been published by the International Monetary Fund’s Avian Flu Working Group which explores the economic impacts of a future pandemic influenza outbreak. Entitled ‘The Global Economic and Financial Impact of an Avian Flu Pandemic and the Role of the IMF’ the report says that if a pandemic is severe, the economic impact is likely to be significant, generating a ‘sharp but only temporary decline in global economic activity’.

The main impacts on businesses are likely to be:

* High absenteeism, as people may be asked to stay at home, or may choose to do so to care for sick relatives or because of fear of being exposed themselves.

* Disruptions to transportation, trade, payment systems, and major utilities, exposing some financially vulnerable enterprises to the risk of bankruptcy.

* Demand could contract sharply, with consumer spending falling and investment being put on hold. Financial repercussions could further exacerbate the economic impact.

On the positive side, once the pandemic has run its course, economic activity should recover relatively quickly. ‘Both consumption and average hours worked might even overshoot the pre-pandemic level temporarily. The pace of the recovery would depend, inter alia, upon business and consumer confidence, the speed of resumption of international trade, and the recovery of asset values.’

Read the report

•Date: 16th March 2006• Region: World • Type: Article •Topic: BC general
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