Economic implications of swine flu
Saturday, 5 September 2009
The Swine Flu may be a localised pandemic to selected countries, but it has a global impact. Even though the travel restriction may be positive for containing the disease, it means that airlines, particularly the North American carriers, could start losing traffic immediately. Hence, the Swine Flu could severely affect the travel and tourism industries, says a study of the MTI Consulting.
In Bangladesh, airport authorities have so far been able to quarantine the Swine Flu victims, however, precautionary measures should also be taken at the borders, the study added. As the winter comes close, the spread of swine flu also increases. Although winter in Bangladesh is not as bitter as in Europe or USA, we can learn from Australia, where Swine Flu significantly increased during winter.
On the other hand, it could prove to be an opportunity for some drug makers. Swiss-based Roche's Tamiflu and British drug maker GlaxoSmithKline's Relenza are both recommended drugs for seasonal flu and have proved to work against the disease. With swine flu emerging this year, the drug makers could have a good year ahead as nations get geared to.
.In fact, the World Bank had estimated in 2008, before the current global recession that a flu pandemic could cost USD 3 trillion and result in nearly 5 per cent drop in world GDP. Of course, the initial impact can be noted in the forex market with peso falling to about 5 per cent against the dollar immediately following the outbreak. Since the global consumer confidence is relatively low, one might speculate a dent in the global demand and supply. In turn, this would affect business spending and investment plans. One can make a comparison to the past outbreak of SARS, which caused a severe dip in the private consumption.
Although more than 80 governments have already stockpiled on relevant drugs including Tamiflu and Relenza in preparation for a possible pandemic, it is expected that nations that have not stockpiled could create huge demand for the drug. So far, Roche has been more successful with Tamiflu than GlaxoSmithKline with Relenza. The Swiss company booked sales of 530 million dollars worth of Tamiflu in 2008, while Glaxo generated only 84 million dollars in sales from Relenza. However, last year both companies witnessed significant drop as governments stopped stockpiling the drug in preparation for bird flu: Roche by 68 per cent and GlaxoSmithKline by 80 per cent. This year will probably show a significantly different record. --MTI
In Bangladesh, airport authorities have so far been able to quarantine the Swine Flu victims, however, precautionary measures should also be taken at the borders, the study added. As the winter comes close, the spread of swine flu also increases. Although winter in Bangladesh is not as bitter as in Europe or USA, we can learn from Australia, where Swine Flu significantly increased during winter.
On the other hand, it could prove to be an opportunity for some drug makers. Swiss-based Roche's Tamiflu and British drug maker GlaxoSmithKline's Relenza are both recommended drugs for seasonal flu and have proved to work against the disease. With swine flu emerging this year, the drug makers could have a good year ahead as nations get geared to.
.In fact, the World Bank had estimated in 2008, before the current global recession that a flu pandemic could cost USD 3 trillion and result in nearly 5 per cent drop in world GDP. Of course, the initial impact can be noted in the forex market with peso falling to about 5 per cent against the dollar immediately following the outbreak. Since the global consumer confidence is relatively low, one might speculate a dent in the global demand and supply. In turn, this would affect business spending and investment plans. One can make a comparison to the past outbreak of SARS, which caused a severe dip in the private consumption.
Although more than 80 governments have already stockpiled on relevant drugs including Tamiflu and Relenza in preparation for a possible pandemic, it is expected that nations that have not stockpiled could create huge demand for the drug. So far, Roche has been more successful with Tamiflu than GlaxoSmithKline with Relenza. The Swiss company booked sales of 530 million dollars worth of Tamiflu in 2008, while Glaxo generated only 84 million dollars in sales from Relenza. However, last year both companies witnessed significant drop as governments stopped stockpiling the drug in preparation for bird flu: Roche by 68 per cent and GlaxoSmithKline by 80 per cent. This year will probably show a significantly different record. --MTI