The deadly pneumonia, Severe Acute Respiratory Syndrome, has badly hit air travel and hospitality industry in South-East Asian nations and would affect their economy.

"I think it will be very bad. First, the air travel has came down and the hospitality industry has been affected. The multiplier effect can be worked out and my guess is that it would affect the economy of the region by 0.5 to one per cent," Singapore Prime Minister Goh Chok Tong told reporters in New Delhi on Tuesday.

Goh, who was given a ceremonial welcome on the forecourt of Rashtrapati Bhavan after his arrival in the country, said the economies of Hong Kong, Singapore and China would be affected by the disease.

The Singapore leader, who is here on a two-day visit to India was received by Prime Minister Atal Bihari Vajpayee, External Affairs Minister Yashwant Sinha and senior officials.

Goh said the two countries had very good relations and during his stay he would discuss bilateral ties and regional and international developments.