Swine Flu could impact on markets and economies

Mexico’s president has ordered a partial economic shutdown to slow the spread of the swine flu virus. The World Health Organization (WHO) has warned that the world was on the brink of a global outbreak of the new flu strain H1N1, and has increased the alert status to Phase 5. This means that human-to-human spread of the virus into at least two countries in one WHO region has occurred.

An International Monetary Fund economist has even warned that some countries could see drastic consequences from the illness.

In Mexico, the worst hit country with 176 deaths, President Felipe Calderon told non business critical government offices and private businesses to stop work on 1 May to avoid further spreading of the virus.
Global markets are not reacting at the moment but the International Monetary Fund's chief economist warned of "quite drastic" consequences for some countries, particularly on tourism, while a top White House aide said the biggest threat was uncertainty.

Christina Romer, chairwoman of the White House Council of Economic Advisers, told a congressional hearing that "Uncertainty is probably the biggest effect right now. It will make consumers more nervous and governments will have to take actions that will have economic consequences."

The WHO and flu experts say they do not yet know enough about this new strain to say how deadly it actually is, how far it might spread and how long any potential pandemic may last. The financial spread betting markets are awaiting the outcome of this.