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Swine flu could break fragile world economy

Swine flu could break fragile world economy article image

The deadly strain of flu that struck North America this month could have a devastating impact on the already fragile world economy, according to economic analysts. More than one hundred people in Mexico have died from the swine flu, and presence of the disease has been confirmed in the USA, Canada and New Zealand. ''If it does become bigger and impacts not just on regional but global confidence [the flu] can spur another bout of risk aversion and can have broader implications through a range of assets classes," said international economist Mark Rodrigues, from the National Australia Bank. The swine flu has been compared with the SARS (severe acute respiratory syndrome) outbreak from a few years ago, with negative impacts on the economy following similar modelling. Rodrigues says the swine flu ''could have a negative impact on the global economic scene'', including hitting industries such as tourism, and deter commercial activities as people shy away from crowded places: ''If it's serious enough, it can impair the normal functioning of the economic system.'' Research conducted by The Lowy Institute in 2006 revealed that even a 'mild' pandemic would cost the world upwards of US$330 billion in output.

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