Tags: Ebola Outbreak | World Bank | Ebola | Africa | GDP

World Bank: Ebola Epidemic Could Lop $32.6 Billion Off West African GDP

By    |   Tuesday, 14 October 2014 12:12 PM

While the Ebola epidemic has imposed little economic hardship so far, that could change.

If the disease spreads into neighboring countries beyond Liberia, Guinea and Sierra Leone, it could weaken the West African economy to the tune of $32.6 billion by the end of 2015, according to a World Bank study.

To be sure, while $32.6 billion sounds like a large number, that's less than 0.05 percent of global GDP — $76.78 trillion, according to Statista. And the World Bank estimate is a worst-case scenario. Under the best-case scenario, which corresponds to rapid containment within the three most severely affected countries, the lost GDP would amount to $3.8 billion by the end of 2015.

"The economic impacts are already very serious in the core three countries — particularly Liberia and Sierra Leone — and could become catastrophic under a slow-containment, high-Ebola scenario," the World Bank noted. "In broader regional terms, the economic impacts could be limited if immediate national and international responses succeed in containing the epidemic and mitigating aversion behavior. The successful containment of the epidemic in Nigeria and Senegal so far is evidence that this is possible, given some existing health system capacity and a resolute policy response."

Still, it doesn't account for a world pandemic, noted New York Times columnist Andrew Ross Sorkin.

He points out that fear of the disease may cost more than treatment. "Economic consequences result when fear and concern change behavior," David Kotok, chief investment officer of Cumberland Advisors, wrote in a report obtained by Sorkin.

"If consumers and businesses retrench by reducing flights on airplanes, changing vacation plans or altering business connections in a globally interdependent world, GDP growth rates will fall farther."

The impact could be significant. "For our clients, there are a lot of direct and indirect impacts that are already manifesting themselves," Bruce McIndoe, CEO of iJet, a consulting firm that advises multinational companies active in dangerous areas, told International Business Times.

"It means cargo and staff can't get in" to the area.

British Airways has cancelled many of its West African flights.

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While the Ebola epidemic has imposed little economic hardship so far, that could change.
World Bank, Ebola, Africa, GDP
Tuesday, 14 October 2014 12:12 PM
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