Swine flu impact smaller than SARS, RBNZ says

Tuesday 14th July 2009

The economic impact of swine flu will probably be smaller than the SARS epidemic in Hong Kong or the 1918 Spanish influenza outbreak in the US, according to Reserve Bank research.

The influenza H1N1 pandemic will probably slow the economy by 0.6% and "the impact of swine flu on the New Zealand macro-economy is unlikely to be large," a report by the central bank concluded.

It predicts the labour force may shrink 2.3% as a result of the outbreak, with a 1.2% decline in consumer spending in the third quarter, followed by a 0.8% growth in spending the following quarter as the economy bounces back.

"We appreciate there is a real human cost to influenza, as this strain is already unfortunately demonstrating," said Assistant Governor John McDermott in a statement.

More extreme scenarios "are extremely unlikely to occur since they are predicated on much more aggressive strains of influenza."

Westpac Banking Corp. forecast the impact of swine flu could cause New Zealand's economy to shrink by between 1% and 2% this year as employees are forced, or choose, to take time off work, with around 30% of the population likely to contract the virus.

The outbreak of swine flu is the first influenza pandemic in 40 years, and the World Health Organisation has labelled the outbreak "unstoppable".

The country has already felt a drop-off in the tourism sector, with Air New Zealand, the national carrier, reporting a decline in long-haul passenger volumes last month as fears about swine flu discouraged travel on Asian and British air-routes.

Businesswire.co.nz

Comments from our readers

No comments yet