Within days of the so-called swine flu outbreak in Mexico, that country watched the value of its currency descend, tourists and business travelers cancel flights and its exports banned in Asian countries.
Already in the throes of the global recession, Mexico’s economy has steeped further following the influenza outbreak, which is suspected of having claimed 92 lives, according to the country’s health minister, although most reports cite as many as 149.
Five hundred miles south of its Latin American neighbor, Costa Ricans are concerned about a similar situation playing out here. Yet, as of Thursday afternoon, only two unconfirmed case of swine flu had been identified.
“It’s really too early to tell how this might play out in Costa Rica’s economy,” said Lynda Solar, executive director of Costa Rican-American Chamber of Commerce. “A lot will depend on whether we have more cases here.”
Costa Rica’s economy is particularly vulnerable to the effects of reduced travel, as the tourism industry represents 8 percent of the country’s gross domestic product.
The fear of an epidemic has already rattled stock markets worldwide, as investors pulled out of industries perceived to be vulnerable such as tourism, retail and meat products.
Travel companies saw the value of their stock drop on the New York Stock Exchange following the first headlines of the outbreak on Friday. Among online travel booking companies, Expedia experienced a 10 percent decline in reservations, Orbitz fell 7 percent, and Priceline sank 8 percent between Friday, April 24, and Monday, April 27, but has since recovered.
“It’s quite early to give an outlook on how bad the epidemic might get, but the fist sector that would be affected (here in Costa Rica) is tourism,” said Eric Vargas, strategy manager for Aldesa, a San José-based financial consulting firm. “Tourism is already experiencing tough times, and the effect of a potential epidemic would have a significant impact here.”
The one sector of the economy poised to profit from an influenza outbreak is the pharmaceutical industry.
A sampling of three pharmaceutical companies that do business in Costa Rica showed that stock prices have jumped since last Friday’s announcement. Sanofi-Aventis increased 14 percent on the NYSE, Roche Holdings rose by 12 percent, and Merck & Co. saw their stock rise 6 percent.
“We are seeing a spike in demand for certain products sold in drug stores such as (hand sanitizer) and masks,” Vargas said.
“There isn’t a huge growth here, but we might see it increase further.”
In remarks he made in front of the media on Wednesday, Arias cautioned against using the influenza outbreak for personal gain.
“In the case of pharmaceutical companies, distributors and retailers … we ask you with vehemence not to increase prices of the products that the population needs,” he said. “This is not the time to look for gain, but to be of service to the people of Costa Rica.”
Responding to the flu outbreak, several airlines have offered passengers the option of postponing travel to Mexico free of charge in the coming days, including TACA, Central America’s largest airline.
Sofia Valverde, a TACA spokesman, said the outbreak has not affected the airline’s operations.
“At the moment, we haven’t seen many cancelled reservations,” said Valverde, “And we are operating normally.”
Dispelling potential myths that the enclosed cabin of a plane could be an ideal medium for spreading the sickness, the airline is informing the public that filtration systems cleanse the air every two minutes.
– Chrissie Long