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Swine flu fear economy worse than reality

Swine flu fear economy worse than reality article image

Economic analysts believe the fear of swine flu is affecting the economy far more than the reality of the situation. While the travel industry and pork products are being hit, biotech companies developing anti-flu drugs and other sectors selling protective equipment have boomed. Manufacturers of face masks and rubber gloves have benefited from the swine flu, including Malaysian rubber, as well as non-pig product alternatives such as fish sellers, despite an announcement by US Agriculture Secretary Tom Vilsack: "It is perfectly safe to consume pork products from America." Barclays Capital in London compared the crisis to previous threats: "SARS was a crisis of fear [but] fear and panic subsided quickly once the disease was under control, and the affected economies rebounded rapidly." The World Bank estimates that a 'mild' flu epidemic (1.4 million deaths) would cut world output in the first year by 0.7 percent; a 'severe' pandemic (71.1 million deaths) would cut output by 4.8 percent. The threat of a swine flu pandemic has dampened investors' appetite for risk, hence emerging economies are likely to suffer most. The 2003 bird flu outbreak caused 800 deaths, comparatively small against total population, but the psychological effects were significant and cut Asia growth by an estimated two percent in a quarter.

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