- Bernard Murphy is investigations editor at Clinica World Medical Technology News. The opinions expressed are his own -

Bernard Murphy has been following the spread of avian and swine flu across the globe and is an expert in medical diagnostics and regulation. He explains how the threat of bird flu is still present and discusses the latest developments in diagnosing and combating the viruses and the threat they pose to the global economy.

With the number of swine flu fatalities in India touching double figures on Tuesday, panic is slowly setting in.

Schools, malls and cinema halls in Pune are already shut and nearly a thousand people across India have tested positive for the virus.

The H1N1 flu outbreak, declared a pandemic on June 11, has spread around the world since emerging in April and could eventually affect 2 billion people, according to WHO estimates.

But is India ready to tackle the outbreak?

More supplies of flu drug Tamiflu and testing kits are being imported and private hospitals are being asked to help state-run hospitals cope with a surge in people rushing to get tested.

Some also feel that the media hype over swine flu is causing needless fear.

On Tuesday, the Hindustan Times said the common flu could be killing an estimated 572 Indians every day, much more than H1N1 flu -- in most cases, infection has been mild and patients have fully recovered.

So is there really cause for panic?

- Marie Diron is senior economist at Oxford Economics. The opinions expressed are her own -

A swine flu pandemic would affect the economy via various channels involving supply and demand.

On the supply side, infection and death imply that employees would be unable to go to work. This is what most people think about when they think about swine flu’s economic costs.

But the demand channels are likely much more powerful. Fear of infection would keep people away from airports, train stations, restaurants, cinemas and shopping centres. This would imply cuts in travel and tourism and consumer spending.

In addition, uncertainty about the impact and duration of the pandemic would dampen investment, while financial markets would probably experience renewed tensions with spreads between policy and market interest rates rising again and share prices negatively affected.

To get a quantitative estimate of the impact, we need to make a few assumptions. First, based on the experience of previous pandemics and developments so far, we can assume that 30 percent of the world and UK populations would be infected and be unable to go to work for two weeks. We also assume a death rate of 0.4 percent.

Second, we look at the experience of the SARS outbreak in Asia in 2003 to calibrate the likely cuts in discretionary consumption and international travel. This episode showed significant reductions, of around 20 percent and 60 percent respectively. In the current environment of rising unemployment and needs of balance sheet repairs, households could cut discretionary consumption even more sharply.

Under these assumptions, the GDP loss during the six months of the pandemic would amount to around five percent in the UK. This means that GDP growth in 2010 would be at least as bad as in 2009.

However, and although once the pandemic is over the economic bounce back would likely be less sharp than post-SARS, chances are that, by 2011, GDP growth could be above our baseline forecast and the economic loss would be gradually recouped within around three to four years. CPI inflation would likely turn negative for a few months but would rise as pent-up demand is realised.

There is a risk that swine flu tips the UK and the world economy into deflation as the pandemic would hit at a time when businesses and banks are still reeling from the economic crisis.

Rather than catching up on postponed spending, households may raise savings for a longer time, while companies that are already fragile after the recession may succumb to this new shock.

We estimate that under such a scenario the UK and world economies would fall into deflation. UK CPI inflation would fall to around minus one percent throughout 2010-12 and UK GDP growth next year could be as low as minus seven-and-a-half percent. With the government budget deficit already at sky-high levels and the Bank of England’s interest rates pretty much at zero, there is little that public authorities could do to try to buffer the impact.

– Neil Collins is a Reuters columnist. The opinions expressed are his own –

The Spanish owners of London’s three airports must wonder whether someone above the skies has got it in for them.

Having paid top dollar for BAA, Grupo Ferrovial <FER.MC> has had an endless series of problems, of which the worldwide panic over swine flu is just the latest.

Never mind the potential pandemic, things already look bad enough. The problems for the owner of Heathrow, Gatwick and Stansted extend far beyond simply servicing the new debt, piled on top of the old, which the airports must support.

They go back to the fundamental error when the UK government sold all three as a single unit, to maximise the proceeds for the state. Yet it took 20 years for the British competition authorities to admit the obvious, that for a single company to have a stranglehold on flyers from London might be a mistake.

The trigger was Ferrovial’s intention to bid, but the Spaniards ignored the warning, and went ahead anyway. Three years later, they must surely wish they’d never heard of BAA.

The Office of Fair Trading sent the monopoly question to the Competition Commission, which rejected the arguments from Ferrovial and last month demanded the sale of both Gatwick and Heathrow.

BAA was already reeling from the farcical opening of Heathrow’s fifth terminal, but things were to get much worse. It had put Gatwick on the block, with a guide price of two billion pounds. As credit dried up, the price kept coming down, and the queue of bidders shrank.

Last week Heathrow reported the first decline in passenger numbers in half a century, as consumers cut back on discretionary travel.

Standard & Poors, the ratings agency, has told one of the bidders that it would not award investment grade status to the buyer’s debt if it exceeded half the 1.6 billion pounds “regulated asset base” of Gatwick. Analysts now believe that Ferrovial has received just two bids for the airport, each below 1.5 billion pounds.

The latest health scare will do nothing to encourage the buyers to be brave, and, rumbling away in the background like a distant jumbo jet is the continuing resistance to a third runway at Heathrow.

These hammerblows have done terrible damage to the 10.7 billion pounds of BAA’s senior debt. Five-year credit default swaps had ballooned out to 25 percent. The 2014 euro bond fell to around 65 cents, but it and the CDS spreads have rallied a little in relief that there appear to be two credible bids for Gatwick, rather than none. Considering the scale of Ferrovial’s problems, the bonds are not obviously cheap.

The winners here are the former shareholders of BAA, who were bought out for cash at a fabulous price. The institutions who cleaned up are much the same ones who have been vociferously complaining about the travails of Barclays. Perhaps they should remember that Marcus Agius, the Barclays chairman, was the man who so skilfully lured the Spanish into overpaying.

- Eric Auchard is a Reuters columnist. The views expressed are his own --

If you look no further than the latest headlines, you might think a worldwide flu pandemic was already underway with a very real threat to millions of lives.

While there are many unanswered questions early on in the outbreak of flu from Mexico, it is crucial to remember that the number of deaths and reported infections remain small -- even if its spread across the globe has proved worryingly rapid.

While the infected need access to medical care and anti-viral drugs, the rest of the world needs an inoculation against scary statistics and misinformation.

The Internet Age allows facts and rumour to spread almost instantaneously. But knowing of outbreaks across the globe must not be confused with risks of catching the disease.

Already in this outbreak, Lebanon's health minister has called for a halt to the national custom of greeting one another with kisses. Several countries including Russia and China have banned pork imports from Mexico and parts of the United States in the belief that meat could spread the flu.

So far, up to 149 are reported to have died of swine flu in Mexico. The World Health Organisation has upgraded the level of pandemic threat to four on a scale of six -- sustained human-to-human transmission. Stage five signals an "imminent" pandemic.

However, influenza is a big killer every year, with or without a pandemic.

WHO estimates flu kills upward of 250,000 to 500,000 people year after year. "Normal" flu epidemics infect 3 to 5 million a year. Statistics are complicated by inconsistent reporting. Flu often leads to other ailments that end up being listed as the ultimate cause of death.

Flu's typical victims are the elderly, the infirm or the young. The difference with swine flu outbreak in Mexico is that otherwise healthy adults aged 20-50 are vulnerable.

But so far the new swine flu death rates are lower than other recent pandemic scares, a report by Barclays Capital notes. The 2,200 swine flu infections reported have resulted in deaths in 7 percent of cases. Avian flu has killed 61 percent of the 421 people infected since 1997. The death rate from SARS was around 10 percent.

Outside Mexico, 50 infections have been reported in the United States, Canada, Israel, New Zealand, Spain and Scotland. But health experts are baffled that infections outside Mexico appear to be milder and have caused no deaths.

The world's most recent flu pandemic 41 years ago was the 1968 Hong Kong outbreak, which claimed one million lives.

Historically, pandemics occur about three times a century. But like predictions of the next big earthquake, medical experts profess they have no idea when to expect the next pandemic.

Inevitably, comparisons end up turning back to the Spanish Flu of 1918-1920, which killed more than 50 million people, or 2.5 percent of the world's population.

That scourge followed the massive troop movements of World War One at a time of poor communications and before the invention of penicillin and modern healthcare systems. Post-war censorship rules restricted access to news, which limited the ability of communities to make informed decisions to protect themselves against the spread of the flu.

The descent into a global pandemic is not inevitable. Air travel may spread the disease in its early stages, but modern communications and medicine can arm us to respond quickly as the disease evolves.

– James Saft is a Reuters columnist. The opinions expressed are his own –

Besides being a human tragedy, a deadly pandemic is, quite literally, the last thing a global economy suffering a huge drop off in trade and activity needs.

To be very clear, we’ve no idea how severe or widespread the evolving outbreak of a new form of swine flu will be and indications that it seems to be becoming milder as it travels from Mexico are reassuring.

You only need to look at photos of deserted streets, shops and theatres in Mexico City to get a sense of the hit to consumer demand, but the potential for damage to production and distribution is profound too.

One guide for the impact of a dire pandemic is the experience during the Spanish Flu, which spread rapidly across much of the world during 1918 and 1919. About a quarter of the global population was infected and somewhere between 50 and 100 million people lost their lives, according to estimates.

Economic data from the time is woefully thin, but the period of the outbreak in the U.S. corresponds almost exactly with a period the National Bureau of Economic Research deems a contraction.

Businesses of all sorts were badly affected, from life insurers, many of which had to suspend dividends to deal with higher claims, to a telephone company in Tennessee which had so many operators out sick that it had to issue a plea for fewer “unnecessary calls”.

Wages were probably pushed upward by the pandemic, according to a survey of studies of the flu by Thomas Garrett published by the St. Louis Federal Reserve. Click here for PDF.

This is similar to what happened to England following the Black Death, when agricultural labourers were able to make huge strides in pay.

Ironically, Spanish Flu was so called because wartime censorship was less in Spain, leaving people with the false impression that it originated or was more prevalent there because there was more coverage of the illness.

The lack of censorship today and current communications capability probably argue that the economic impact will be both greater proportionally and front loaded. If the flu spreads and is deadly, people will know and their reaction will be to hunker down. We could therefore have a magnified economic effect compared to the actual medical danger.

And just as information spreads more quickly now, the global economy is more tightly knit and the supply lines and chains of most businesses are far more efficient, and as a result more fragile than 90 years ago.

THERE IS NO GOOD TIME FOR A PANDEMIC

Estimates of the economic toll of a pandemic vary widely. The Congressional Budget Office has estimated that another Spanish flu would knock five percent off of U.S. gross domestic product.

The World Bank in 2005 put the global cost at $800 billion for a global pandemic, while the U.S. Centers for Disease Control and Protection in 1999 put the domestic cost at about 1.5 percent of GDP.

So, if there is a pandemic, we can expect it to pull any green shoots of recovery up by the roots and send economic activity and confidence tumbling yet again.

It would also represent yet another claim, really an imperative, on already strained government resources. If a country weakened by the economic crisis were to be particularly badly hit, it could damage that government’s ability to sell debt or drive its currency lower.

The impact on the financial system, however, might not be so bad, according to a study of the Spanish Flu by the Philadelphia Federal Reserve.

The payments system continued to function throughout the crisis and, at least as measured by the number of bank failures, the period of the pandemic was not a bad one. That said, the banking system in 1918 was almost certainly in nothing approaching the perilous state it is today.

Bond and stock markets also continued to function, with volumes in stocks actually increasing. Almost unbelievably the Dow Jones Industrial Average ended 1918 with a gain of 10.5 percent, setting the stage for a 30 percent post-war rally in the early part of 1919.

That could be because government censorship left investors in the dark, but after all a horrific European war was ending and the seeds of the 1920s boom were being sowed.

All of what will happen now however, is fundamentally unknowable and the best we can do is to hope that, unlike subprime, this crisis is contained.

- At the time of publication James Saft did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund-

Dean Wright is Global Editor, Ethics, Innovation and News Standards. Any opinions are his own.

There’s nothing like a disease outbreak to highlight the value of the media in alerting and informing the public in the face of an emergency.

There’s also nothing like it to bring out some of our more excessive behavior, essentially shouting “Run for your lives! (but, whatever you do, stay tuned, keep reading the website and don't forget to buy the paper!).”

An outbreak of a form of influenza, which was known as swine flu before the World Health Organization changed the name, has killed scores in Mexico and infected others in the United States, Canada, Europe and New Zealand. It's already having an effect on markets and travel plans, in addition to the obvious impact on public health.

The impact on markets could become more significant in time, but the impact on the media was practically immediate.

Cable television programmers went into crisis mode and a look at newspaper front pages and website home pages around the world showed a range of responses, from the almost hysterical to the concerned and more measured.

• In the New York Daily News: “SWINE FLU SPREADS!” (though it was played below a sports story on the New York Yankees losing to the Boston Red Sox).
• In the New York Post: “HOG WILD!” (also playing second to the Yankees' humiliation, but illustrated with a pig sucking on a thermometer).
• In The Japan Times (using a Reuters story): "Swine flu in Mexico sparks global panic"
• In the South China Morning Post (which certainly has experience in covering bird flu and SARS): “Asia on high alert for swine flu as airports step up checks.”
• In The Guardian: “Swine flu: call for global action as outbreak spreads.”
• In the Toronto Sun: "CALM URGED AS FLU FEARS GROW."

Later Monday, after the European Union health commissioner advised Europeans to postpone nonessential travel to the United States and Mexico, The New York Times led its website with “Europe Warned on U.S. Travel,” with a deck reflecting transatlantic disagreement, “Flu Advisory Unwarranted, C.D.C. Says.”

The BBC website focused on the confirmation of flu cases in the UK, with extensive Q&A's on the origins of the disease and how it spreads and contributions from readers who were dealing with disease (some of them medical professionals in Mexico).

Big, bad-news stories can mean surges in audiences for media outlets and they certainly raise the adrenalin level of editors and reporters. They offer the temptation to go to excess, but they also offer the opportunity for us be of priceless service to our customers, clients and readers.

The question for me is how we in the media make sure we report accurately and informatively on the story and its impact on the markets and consumers’ lives without minimizing and without sensationalizing it.

"This is the type of story where our goal to stay factual and keep perspective is essential to uphold," says Reuters Editor-in-Chief David Schlesinger. "Our role is neither to trivialize nor to hype or scaremonger, but to describe accurately what is happening and put its implications in context."

Reuters has focused a great deal of resources—rightly, given our customers and audience—on the implications for the markets and the impact on the global economic downturn.

On Monday afternoon, Reuters.com was leading with “Will global recovery catch the flu?” atop a package of stories on possible market scenarios, the EU travel warning and factboxes on health precautions and industries being affected. One story noted, not surprisingly, that travel and tourism stocks were in turmoil.

Reuters.com also featured a special coverage page with the latest news, accompanied by a sober presentation of "Swine Flu Facts." There's even an invitation to receive updates on Twitter. Call me a skeptic on Twitter, but 140 characters won't do much to add context to the story. Still, no one ever said Twitter was about context and at least you can follow developments, whether or not you're near a computer.

My Reuters colleagues—especially the ones working bravely and tirelessly in Mexico—are succeeding in upholding the goal of staying factual and keeping events in perspective. It's our mission to provide the information and insight our audience and customers need to make intelligent decisions about their investments and their lives. As shown by the World Health Organization's decision Monday to raise the pandemic alert to Level 4, and later to Level 5, there's plenty of drama to report without adding to it.

The flu story is still in its early stages and it remains to be seen if this becomes one of the biggest stories of our time. Whatever happens, it won't hurt us all to take a deep breath now.