Potential Economic Impact of an Avian Flu Pandemic on Asia

Date: November 2005
Type: Papers and Briefs
Series: ERD Policy Briefs
ISSN: 1655-5260 (print)


A flu pandemic would put at risk the health of millions and have serious economic consequences. The recent outbreak of the avian influenza H5N1 (avian flu), which started in late 2003, has raised concerns about a new global pandemic. The outbreak has already severely damaged poultry production in several countries. Coming one year after the outbreak of SARS1 in 2003, the public was quite alert and governments took action to cull and destroy poultry at risk. However, the reappearance of the disease in 2005 shows that this action was not sufficient and there is continued risk of human infection.

This brief looks at the possible economic consequences for Asia of a mutation of avian flu leading to human-to-human transmission, using different assumptions about the duration and virulence of the flu pandemic. The analysis looks at a relatively mild outbreak, based on the historical experience of previous flu outbreaks and SARS. It focuses on the short-run impact of a pandemic on aggregate economic activity. A pandemic will likely slow or halt economic growth in Asia and lead to a significant reduction in trade, particularly of services. In the long run, potential economic growth will be lower and poverty will increase.


  • Introduction
  • Background
  • Estimating the Economic Costs of Avian Flu
  • Economic Scenarios
  • Long-run Impact
  • Government and International Response
  • Conclusions
  • References