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SARS to hit Asia with $11-50 bn dollar loss
April 25, 2003 19:07 IST
The Asian economy is likely to suffer a loss of $11-50 billion following the outbreak of severe acute respiratory syndrome epidemic, a study by industry chamber Federation of Indian Chambers of Commerce and Industry said on Friday.
The global economic activity would incur a loss of about $30 billion due to SARS and the world economic growth has been scaled down to 2.3 per cent for 2003 from the earlier forecast of 2.8 per cent, the study titled 'SARS: Impact and imperatives for intra-Asian cooperation' said.
The study was conducted by the Far East Asian division of FICCI with inputs from industry chambers from the region and analysts.
It quoted Morgan Stanley, which has reduced the gross domestic product growth rate for Asia (excluding Japan, Australia and India) by 0.6 per cent with countries like China, Singapore, Taiwan likely to fall short of their respective growth targets.
FICCI described SARS as the "most serious single factor" which could adversely affect growth in Asia.
"The deleterious impact of SARS already and its future impact, aggravated by a growing uncertainty, could affect many more sectors in Asia, productivity, profitability, trade and foreign investments".
It said the sudden outbreak and continuous spread of SARS has been referred to as "another blow to confidence" along with the Iraq war, downtrend in United States and European growth and economic recessions in Japan.
Sectors like travel, tourism and retail industries, especially in Hong Kong and Singapore, have seen major downtrend in business due to SARS, the FICCI study said.
Airlines, which have already been severely affected by the war in Iraq, have now cancelled flights to Asia due to plunging traffic and analysts fear the epidemic would worsen the current situation.
Hotels in the region were suffering from a sharp dip in occupancy rates while the tourism, retail sales, electronics and manufacturing sectors have been greatly affected, the study said.
According to UNCTAD, since most of the affected Asian economies like China, Hong Kong, Singapore, Taiwan and Malaysia strongly depend on their services sector for growth, SARS was likely to affect growth rates for the current year though the extent would vary depending on respective steps and restrictions imposed by each country.
FICCI said the Asian countries should respond to the crisis in a united manner and combine their resources to enhance their ability to uncover and contain the spread of the deadly virus, which was threatening to paralyse growth and prosperity of Asia and the global economy.
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