Until this week, talk of “global contagion” had been confined to the banking crisis, said The Times. Now Mexico City is a ghost town, the US has declared a public health emergency, and Britain has ordered 32 million face masks.
The H1N1 virus – an infectious form of swine flu that has jumped from pigs to humans and is now being spread globally – first emerged in Mexico, where officials say over 150 people have died of it. There are more than 110 confirmed cases in the US and one fatality, while cases have been detected in countries ranging from Britain and Canada to New Zealand and Israel.
The flu virus is “so unpredictable and knowledge of the latest strain so scarce”, said the FT, that it’s hard to gauge whether this could turn into a lethal pandemic similar to the Spanish flu in 1918. The good news is that this virus is responding to antiviral treatments such as Tamiflu, a drug that many countries have already stockpiled.
The Asian Sars outbreak in 2003 shows what damage such diseases can do as the “media transmits angst”, said Ambrose Evans-Pritchard in The Daily Telegraph. Cathay Pacific slashed 42% of its flights to Asia and the Mandarin Oriental hotel in Hong Kong was reduced to just one guest. The Asian Development Bank estimates that the episode cost Asia 0.6%-2% of GDP. That time the damage was short-lived, thanks to strong Western demand.
What next?
This time, however, the world economy is shrinking for the first time since the war. If the flu stays largely confined to the Americas and is easily treatable, it will cost around 0.25% of GDP, reckoned Hamish McRae in The Independent.
However, the worst-case scenario would be a severe global pandemic. That could knock 5% off global growth, according to estimates by the World Bank. With the world in no state to cope with another shock, “this had better be a flu” that’s easy to contain, said Rob Cox on Breakingviews.