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)