World Bank sees modest economic drag from Zika

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Bogota / AP

The spread of Zika will have a modest drag on economies in Latin America, with tourism-dependent Caribbean nations most at risk, the World Bank said. It made $150 million immediately available to help fight the virus.
The World Health Organization has declared a global health emergency in response to the Zika outbreak and the U.S. is urging pregnant women to avoid travel to the 26 nations and territories in the Americas where Zika is present because researchers have identified possible links between the virus and rare birth defects.
But despite the scare, the World Bank says the impact from the epidemic is likely to be small.
In a report, it estimates lost revenue will total only $3.6 billion, or about 0.6 percent of the region’s gross domestic product. That would come from reduced travel to the region and sick employees missing work, while anti-mosquito efforts will strain already tight national budgets.
For smaller island-states, the impact could reach as high as 1.6 percent of GDP, the bank said. The Bahamas, Barbados and Antigua and Barbuda are among the nations most at risk, it said.
The forecast assumes the regional and international response to the virus is swift and well-coordinated.
“Our analysis underscores the importance of urgent action to halt the spread of the Zika virus and to protect the health and well-being of people in the affected countries,” Jim Yong Kim, president of the Washington-based World Bank, said.
While a number of countries have reported a rash of business conference and wedding cancellations, hotels were booked full and the mood as festive as ever during this month’s Carnival celebration in Brazil, the epicenter of the epidemic. In Rio de Janeiro, average hotel occupancy was 86 percent during the festivities, an increase of almost three percentage points over the previous year, according to the Brazilian Hoteliers’ Association.
Caribbean nations are similarly unfazed about economic losses, with officials forecasting that tourist arrivals to the region would increase about 5 percent this year from nearly 29 million visitors in 2015.

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