Swine flu fears caused a bit of a selloff on Wall Street this week but, considering the potential for economic devastation, it’s surprising that the reaction wasn’t more severe. Nariman Behravesh, chief economist at IHS Global Insight, says the flu outbreak couldn’t have come at a worse time for the global economy.

In an emailed analysis, Behravesh says the economy will be hurt by worker deaths and absences, by restrictions on travel and trade, and by the possible closure of schools and transit systems. Even if the epidemic doesn’t spread much more, it may cause people to cut back on  travel, shopping, restaurant meals, going to the movies and a host of other spending.

Emerging-market countries will be hurt the most, Behravesh writes:

In an epidemic (roughly 75 million infected in the United States and 100,000 fatalities), the supply and demand effects cut less than 0.5% off the growth rate of real GDP and last less than a year. The impact in emerging markets would likely be two to three times as big.

In a more serious epidemic — or pandemic — with fatalities four to five times higher, the impact on real GDP growth in developed economies would be more like -2% to -3%. In the case of the United States, this could mean a growth rate of -4% to -5% in 2009 and an even bigger rise in the unemployment rate. For poorer countries, which are less able to cope with such an outbreak, the impact would be devastating, and produce downturns of depression-like proportions.