ING Financial Markets downgraded Monday its GDP forecasts for Hong Kong, Indonesia, South Korea, Malaysia, Singapore, Thailand and Taiwan, warning that Severe Acute Respiratory Syndrome (SARS) will pose more of a threat to Asia's economic growth than the US-led war against Iraq.
Tim Condon, chief economist of the Financial Markets, a securities group active in the Asia-Pacific region, said the economic impact of SARS will be felt mainly through lower tourist arrivals and the knock-on impact of lower consumer spending.
ING Financial Markets predicts a 25 percent drop in second quarter receipts across Asia, and for each lost US dollar of tourist receipts, a 50 cent drop in private consumption.
"SARS appears to be a more serious threat to regional growth than the US-Iraq war," Condon said, noting the highly tourist dependent economies of Hong Kong, Malaysia and Thailand will be the most exposed to damage from SARS.
Monthly tourist arrival growth in Hong Kong slumped to 3.6 percent in March from 28 percent in January-February, ING Financial Markets estimated. Thailand is expected to see a drop of12 percent. Singapore has reported a drop in arrivals of 14.8 percent in March, and Indonesia is expected to drop by 10 percent for the whole year.
ING Financial Market's estimates for Asia growth, excluding Japan, has been downgraded to 5.3 percent from 5.7 percent. Hong Kong GDP has been downgraded to 1.5 percent from 2.5 percent, Singapore from 3.5 percent to 2 percent, and Malaysia from 5 percent to 4 percent.
(Xinhua News Agency April 14, 2003)
