Cost of bad pandemic put at $24b

Last updated 05:00 28/04/2009

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A severe influenza pandemic could deliver a $24 billion hit to the economy, the Treasury estimates.

After the 2006 bird flu scare, a Treasury paper, using the infection and mortality rates of the 1918 Spanish flu outbreak, estimated a severe pandemic could wipe up to 10 per cent off gross domestic product, equivalent to up to $16 billion.

Over four years estimated losses would accumulate to about 10 per cent or 15 per cent of one year's gdp. About 40 per cent of the population would be infected and 2 per cent of those would die; equivalent to about 35,000 people. In a typical year about 5 per cent of adults and 20 per cent of children suffer from an influenza-like illness.

The impact of a less severe pandemic, similar to those in 1958 and 1967, would cut gdp by up to 2.1 per cent in the first year, roughly the impact of a typical business cycle downturn.

"Although the economic effects may be dwarfed by the social and human costs of death and illness, it is still important to evaluate how a pandemic may affect the economy so as to guide policy interventions to lessen the economic impact."

The biggest economic impacts would come from the loss of work hours, through sickness and death, and the impact of people avoiding contact, or "social distancing".

Meanwhile, Tourism NZ chief executive George Hickton said the swine flu situation was not serious for the tourism industry yet, but was being monitored. After speaking to staff in international offices, he said there had been no inquiries from travellers about whether swine flu affected travel plans to New Zealand.

"At this stage there's been no concern, but it's very early and we'll have to see how that plays out. We can't draw any conclusions yet."

Any calls on travel restrictions or advice would be made by border security and health agencies.

The outbreak of Sars hurt inbound tourism numbers from Asia about six years ago, but Mr Hickton said this potential swine flu epidemic was different. "Sars was quite severe, whereas these people seem to be recovering."

Air traffic to New Zealand from Mexico, the assumed source of the swine flu outbreak, was minimal, compared with the thousands of tourists who flew from Asia.

Tourism NZ's main concern was that international publicity on the New Zealand situation was accurate and informative for travellers.

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- The Dominion Post

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