World Bank: SARS to slightly trim Asian economic growth

TOKYO (AP) - The World Bank expects the SARS virus outbreak to chip off 0.3 percentage point growth in East Asia because of damage to tourism and retail businesses, according to a report released Thursday.

The World Bank revised its 2003 growth forecast for the region by 1 percent to 5 percent, taking into account uncertainties such as the war in Iraq, a global electronics slump and SARS.

But the six-month report says the damage from the deadly respiratory disease, Severe Acute Respiratory Syndrome, will likely be temporary and Asia will rebound to 6 percent growth in 2004. Regional growth in 2002 was 6.6 percent.

``Regional growth is expected to rebound to closer to 6 percent in 2004 as this year's temporary shocks play out,'' Jemal-ud-din Kassum, World Bank vice president for East Asia and the Pacific, said in a video conference from Washington, D.C.

Fears about SARS have sent tourism tumbling and caused cancellations of business meetings and trade shows in Asia, as people avoid such contacts, the World Bank said. SARS, which has caused more than 250 deaths worldwide, is growing into a major threat to the region's blossoming exports.

The damage from SARS to the region is estimated at 0.3 percentage points but could worsen to double that depending on how nations succeed in containing the disease through public health measures.

Calling SARS ``the region's most pressing concern,'' the World Bank warned that the long term impact from SARS such as curtailed investment remains unclear because public health experts are still working to understand the virus.

Public perceptions, rather than the disease itself, can hurt economies, making economic assessments even more difficult, it said.

Hong Kong's economic growth is hurt by as much as 2 percent from SARS, with growth this year predicted at 2 percent, while likely recovering to 4 percent in 2004, according to the World Bank.

China will continue to grow at a robust rate of 7.2 percent for both this year and next, the report said. China has the largest number of reported SARS cases at more than 2,300 people. Worldwide, there are more than 4,200 cases. (PROFILE (CAT:Financial;) (CAT:Business;) (CAT:Travel;) (CAT:Labor;) (CAT:Banking;) (CAT:Iraq;) (SRC:AP; ST:US;) )