http://dealbook.nytimes.com/2014/10/13/calculating-the-grim-costs-of-ebola/?_php=true&_type=blogs&_r=0
This article discusses the economic impact of the Ebola virus. According to a recent study by the World Bank, financial analysts and others estimate "a potential economic drain of as much as $32.6 billion by the end of 2015 if the epidemic spreads to neighboring countries beyond Liberia, Guinea, and Sierra Leone". The estimate reflects the potential cost of 200,000 Ebola cases outside of Liberia, Guinea, and Sierra Leone. It does not account for any costs beyond 18 months nor assume a global pandemic.
Many are also foreseeing a large decrease in GDP growth rates due to a potential decrease in airline flights, vacations, and foreign business in affected countries. One analyst specifically states that "if the Ebola epidemic were to spread domestically, it would have a significant impact on the airline and entire hospitality sector".
The article states that the greatest economic danger is the economic isolation of countries.
I found this article interesting due to the recent hysteria and confusion surrounding Ebola. I think the Ebola crisis is a perfect example of the impact that human emotions can have on stock and investment. I also believe that we will continue to see a negative impact on the airline sector until we receive clear information about Ebola and consumers feel safe to travel again.
I completely agree, the airlines are going to take a huge hit economically. But for those travelers who aren't afraid to fly could see benefits from this. With a drastic drop in demand of flights, the airlines could potentially lower the cost of tickets to encourage traveling. For those brave frequent fliers, this wouldn't be a bad thing.
ReplyDeleteI agree with what you are saying. People do not want to fly because of the chance of Ebola. The Dow Jones has taken a large hit in the past week with Amber Vinson who traveled to Cleveland Hopkins Airport. As long as people are still contracting Ebola and there is no vaccine, the economy will keep experiencing negative growth.
ReplyDeleteThere's no question that airlines have been negatively affected by the Ebola outbreak. I wonder how much money it is really causing them to lose and if lower tickets prices are tempting consumers to fly regardless of the outbreak since the disease isn't very easy to contract. Hopefully the virus can be controlled so that airline profits don't continue to decrease for months on end.
ReplyDeleteI read an interesting article regarding the economies in these African nations, as well as the effect the virus will have on the price of chocolate. Apparently the majority of the world's cocoa beans come from western Africa, and the countries hit hardest by the virus are the countries that supply most of the labor during the cultivating season.
ReplyDeleteThe Ebola epidemic is a perfect example to show how emotions can impact the market. I don't find it surprising that airlines and investment are being effected by the scare. This could be good for consumers, but not for sellers. Either way, the economy is negatively impacted.
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