How bird flu could have a positive economic impact

The prospect of a bird flu pandemic is back on the front pages. But the chances of a genuine economic meltdown are still very remote, says Jeremy Batstone at Charles Stanley. In fact, bird flu may even have had a positive impact on the global economy...

On January 18th, Dr. Lee Jong-Wook, director general of the World Health Organisation (WHO) reiterated his view (made public in early November last year) that it was only a matter of time before an avian flu virus (likely H5N1) acquired the ability to mutate into human form, sparking the risk of a global pandemic. There have been three influenza pandemics during the course of the previous century 1918, 1957 and 1968. Another pandemic is thought by many scientists to be overdue. As the number of cases increases (albeit slowly) so the media headlines have begun to pick up again after a lull over Christmas.

Although we remain fairly sanguine regarding the risks, the fact that a number of companies are taking high profile measures to protect their staff and that a number of US States are beginning to show some signs of agitation, does indicate to us that the risk is worth exploring. The purpose of this note is to consider, in the broadest terms, what the impact on the global economy might be were a global pandemic to break out.

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