Flu pandemic could hit Dutch economy with 5% drop in GDP

[Dove]

Flu pandemic could hit Dutch economy with 5% drop in GDP

www.chinaview.cn 2006-03-16 07:48:27

http://news.xinhuanet.com/english/2006-03/16/content_4307572.htm

BRUSSELS, March 15 (Xinhuanet) -- The Dutch Central Bank (DNB) warned on Wednesday that a major flu pandemic could lead to a minimum 5 percent drop in gross national product in the Netherlands.

The DNB included its analysis of the potential consequences of a major flu outbreak in its latest quarterly report. The H5N1 strain of bird flu, which is potentially deadly for humans, has been detected in 11 of the 25 countries of the European Union.

As the Netherlands is very dependent on exports, the economy would be particularly vulnerable in a pandemic as other countries might close their borders to Dutch products, the DNB said.

The losses to the Dutch economy might also be permanent as the composition of the population is changing, leading to reductions in production.

The financial sector, which the DNB oversees, would also feel the impact of a pandemic, the report said. Insurance companies would face high claims as a result of deaths and illness. An increase in bankruptcies and a drop in applications for mortgages and credit also posed a threat to the industry, the DNB said. Enditem

 

[Dove]

Re: Flu pandemic could hit Dutch economy with 5% drop in GDP

Flu pandemic could knock 5 points off Dutch GDP-c.bank

15 Mar 2006 15:30:08 GMT

Source: Reuters
http://www.alertnet.org/thenews/newsdesk/L15677682.htm

AMSTERDAM, March 15 (Reuters) - The Dutch economy is more vulnerable to a flu pandemic than other European countries due to its open economy, large imports from Asia and relatively big service exports, central bank researchers said on Wednesday.

In the case of a serious outbreak, gross domestic product growth could drop by as much as 5 percentage points, the central bank said in its quarterly bulletin.

Experts fear the H5N1 strain of the deadly bird flu virus could change into a form easily transmitted from person to person and sweep the world, killing millions.

Such a pandemic would hit private consumption and the tourism sector and lead to a larger number of employees staying home because they are sick or have to take care of family members, the Dutch central bank (DNB) said.

Scenarios assumed an absentee rate of 25 to 30 percent, with employees missing one to three weeks of work, the bank said, adding that would be compounded by disruption of supply chains,

"A breakdown will lead to disruptions further up the chain, especially if supplies are limited and it is not possible to switch suppliers," the bank said.

"Especially multinationals should allow for loss of production ... because they are more dependent than other firms on undisturbed international transport of goods and people."

Central banks could face different inflation patterns, the report said.

"Inflation could first rise due to shortages, while over the longer term prices could come under pressure due to falling economic activity," the DNB said.

"Central banks should also pay attention to long-term inflation and inflation expectations, and communicate this well to possibly nervous financial markets."


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