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'Fast growth rebound if bird flu hits'

A bird flu pandemic will hit world economies for one to two quarters as tourism and demand for consumer goods fall sharply, but growth should rebound.

india Updated: May 03, 2006 14:22 IST

A bird flu pandemic will hit world economies for one to two quarters as tourism and demand for consumer goods fall sharply, but growth should rebound at a pace similar to Asia's swift recovery from SARS, a senior economist said on Wednesday.

Apart from tourism, a human-to-human pandemic would also have a huge impact on airlines, restaurants and hotels as people stop travelling and stay at home, said Martin Meltzer, senior health economist at the US Centres for Disease Control and Prevention (CDC).

Economies would also see a rapid drop in demand for consumer goods -- including everything from refrigerators to automobiles, he said.

"The SARS outbreak really informed us of what the impact might be," said Meltzer, speaking on the sidelines of a bird flu conference in Singapore held by the Lancet medical journal.

"SARS was confined to four or five countries, while an influenza pandemic could occur around the globe," Meltzer said.

Severe Acute Respiratory Syndrome in 2003 killed about 800 people, crippling air travel and tourism, particularly in Asia, causing losses in the billions of dollars.

Tourist arrivals collapsed by 20-70 per cent and retail sales dropped by 5-10 per cent in the second quarter of 2003, the International Monetary Fund said in a report. It estimated that regional economic growth was cut by 0.6 percentage point.

But most industries recovered fairly swiftly once SARS was brought under control.

The World Bank estimates that a year-long bird flu pandemic would cost the world economy $800 billion. Some expect a pandemic could last for six-to-eight weeks at a time, with renewed waves of infection.

The Asian Development Bank has said a year-long shock would cost Asia as much as $283 billion and would reduce the region's gross domestic product by 6.5 percentage points, hitting Hong Kong and Singapore the most.

The IMF has said the biggest disruption for economies would come from high absenteeism in the work place.


The biggest impact of an influenza pandemic, which would likely last less than four months depending on the size of the countries affected, would probably hit growth for just one to two quarters, Meltzer said.

"After that, I expect to see a great rebound," he said. "People will return and we will see normal growth rates."

The leisure and hospitality sectors might take longer to recover, while healthcare will need more time to recoup from the strains caused by a pandemic, he said.

Meltzer, who has worked at the CDC for 11 years, said that governments are getting better prepared.

"Globally, we are better-positioned than we were two years ago, but we are not finished," he said. "The plans have to be flexible depending on how the disease is spread."

When asked whether governments should be investing more in the development of vaccines rather than anti-virals such as Tamiflu, Meltzer said there was "no magic bullet" to fight bird flu.

Since re-emerging in Asia in late 2003, bird flu has killed at least 113, who contracted the virus from contact with infected birds. There have been no cases of bird flu spreading between humans.

A US White House bird flu plan released to Reuters on Wednesday sets out detailed plans for closing schools in case of a pandemic and asks businesses to let employees stay home without sanction.

The plan assumes the worst -- that if an influenza pandemic begins it will be months, if not years, before the best defence, a vaccine, can be formulated and manufactured.

The US government is assuming that 40 per cent of the work force will be absent at the peak of a pandemic, and it is based on a worst-case scenario in which 1.9 million Americans die from the virus and as many as 30 per cent become infected.

First Published: May 03, 2006 14:05 IST