The most severe impact of the Ebolaepidemic, which began in Guinea in December 2013 and quicklyspread to Liberia and Sierra Leone, has been in lost humanlives and suffering. This report, prepared for the WorldEconomic Forum at Davos, focuses on the indirect, economiccosts, in particular the effects on economic output in 2015.Most of the economic cost is driven by aversion behavior,which consists of both the actions taken by individuals toavoid exposure to the illness and actions taken by investorsin anticipation of those individual choices. The reportfirst estimates the impact of the epidemic on gross domesticproduct (GDP) in Guinea, Liberia, and Sierra Leone. Here thereport builds on sector-specific analysis to update WorldBank forecasts for the three countries, and incorporatesrecent results of World Bank-financed cellphone surveys inLiberia and Sierra Leone. The authors evaluate the economiceffects of the epidemic on the continent, beyond the threehardest-hit countries, using assessments by World Bankcountry economists across the 48 countries of sub-SaharanAfrica. Finally, the report updates estimates from theglobal economic model of the research arm of the World Bank,to quantify the 2015 impact of the potential spread of theepidemic to other countries. Updated general equilibriumanalysis suggests that further spread of the epidemic toother African economies, if the epidemic is not containedand instances of infection continue to occur in othercountries, can potentially exact an economic toll of theorder of 6 billion dollars. The results underscore theimportance of: (a) Ebola and broader pandemic preparednessin African countries; and (b) reaching the goal of zero newcases as soon as possible in the three most affected countries.
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