The emergence of a lethal and rapidly spreading pandemic could lead to unimaginable human suffering and bring about far reaching negative economic and market consequences.
The reality of past world pandemics show us that the impact has not been significant—even when the global economy was especially vulnerable to a shock.
Individuals travelling to the Olympic Games may be wise to take some precautions against Zika, but investors may have little need to take action in their portfolios.
Of the 500,000 people expected to be visiting Rio de Janeiro for the 2016 Summer Olympics some may become infected with Brazil’s Zika virus and establish new outbreaks upon their return home. Brazil’s outbreak, which has infected over 30,000 people, likely stemmed from a single person that brought the disease to the country between May and December 2013—perhaps from French Polynesia (where 66% of the population was infected) by a soccer player during the 2013 FIFA Confederations Cup, according to research published by the American Association for the Advancement of Science.
It’s easy to imagine a nightmare scenario for any such event; indeed Hollywood has done so many times. The emergence of a lethal and rapidly spreading pandemic could lead to terrible human suffering and bring about far reaching negative economic and market consequences. However, the reality of past world pandemics has been far different. History shows us that the impact on the economy and markets has not been significant—even when the global economy was especially vulnerable to a shock, as you can see in the graphic below.