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OECD warns of severe economic impact of SARS crisis
Friday, 25 April 2003, 19:30 IST
PARIS: The Organisation for Economic Co-operation and Development (OECD) warned Thursday that the rapid spread of Severe Acute Respiratory Syndrome (SARS) could devastate global economy.
"The global spread of the SARS epidemic could have economically disruptive effects similar to those already occurring in parts of Asia," an OECD report released here stated.
The economic impact of SARS will depend largely on how promptly and effectively the virus can be brought under control, OECD said.
"The risks would seem slanted to the downside. But activity could well stage a stronger than foreseen comeback in response to a successful stabilisation of the situation in Iraq, and to the existing macroeconomic policy impulses, which have yet to fully work their way through," said the twice-yearly report.
While SARS continues to spread, having already claimed some 250 lives, the OECD said the tourism and retail sectors would be most impacted in the worst affected countries.
The warning comes soon after the World Bank forecast a drop in East Asian economic growth due to the deadly virus that is known to have originated in China in November.
On Wednesday, the World Health Organisation issued an advisory against non-essential travel to Beijing, China's Shanxi province, and Toronto in Canada.
Citing past experiences when outbreak of diseases had impacted economies, the OECD said: "Local or sectoral impacts in the most seriously affected countries could be significant if the emergency were to worsen and persist.
"The ultimate macroeconomic repercussions of the epidemic are difficult to ascertain at this early stage, but past experience with other disease outbreaks suggests that local or sectoral impacts in the most seriously affected countries could be significant if the emergency were to worsen and persist," OECD said.
"The economic impact of this epidemic depends largely on how promptly and effectively the virus can be brought under control."
The report forecasts a weak and hesitant near-term outlook for OECD area.
"Following the rapid resolution of the Iraq conflict, activity may be expected to firm later in 2003, as geopolitical tensions recede. The pace of growth will then largely depend on how fully the imbalances that originally caused the downturn have been corrected."
Growth is expected in 2004, but it remains heavily dependent on the U.S.
As OECD economies pick up, world trade will accelerate.
"Outside the OECD area, an important feature has been the relative buoyancy of the non-OECD Asian economies and in particular China and Dynamic Asia, which is likely to continue to be a positive factor for global trade growth in the medium term," the report said.
Source: IANS
Source: IANS