The Hindu : SARS impact — ADB assessment

Online edition of India's National Newspaper
Tuesday, Apr 29, 2003

Business

Business

SARS impact — ADB assessment

By Our Special Correspondent

NEW DELHI APRIL 28. Contrary to some other estimation, the Asian Development Bank (ADB) has expressed the view that the economic impact of SARS (severe acute respiratory syndrome) was largely confined to East Asia and Southeast Asia and was likely to depress the growth in developing economies in the Asian region by 0.1-0.2 per cent only.

Other financial institutions have projected that the crippling effect of the SARS outbreak on sectors such as tourism, retail trade and airline business would bring down growth rates in Asia (excluding Japan, Australia and India) by 0.6 per cent while the decline could be as much as 1.5 per cent to 2.5 per cent in the case of Singapore and by 0.9 per cent and 0.7 per cent in Malaysia and Thailand, respectively.

ADB, however, maintained that despite the recent outbreak of SARS, Asia was expected to outperform the rest of the world, including the U. S., Japan and the Euro area, as the fundamentals were strong to weather an uncertain external environment and the SARS.

According to the ADB, the main driving force behind the robust outlook for Asia was the expected domestic demand, improving export performance, a supportive policy environment and prudent fiscal and monetary policies.

However, it said Asia's economic outlook remains highly vulnerable to risks like further weakness in industrial nations and the impact of SARS on tourism and business travel.

Citing the strengths of the region to face any emerging global challenges, the bank said the region's strong fundamentals were reflected by the high level of reserves and low rates of inflation, leaving it in a good position to weather an uncertain external environment and SARS. As for India, the bank has said the country was poised to maintain a high 6 per cent growth this year, despite the Iraq war and SARS, outpacing the growth of many of the other countries in the Asian region, barring China, which is expected to grow by 7.3 per cent.

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