The plight of the rouble, the bolivar and the baht may seem a world removed to those of us whose pockets are filled with the plain old pound.

But in an increasingly interdependent global economy, Russia, Venezuela and Thailand may not be as far-flung as they once appeared.

The economic contagion which has been sweeping global markets in recent months, spreading from Asia to Latin America to eastern Europe and Russia, is threatening to become a full-blown epidemic and Ireland's small, open economy cannot remain indefinitely immune to it.

The stellar Irish economic performance of recent years has been fuelled by the twin engines of buoyant consumer demand and booming exports. The latter, in particular, are vulnerable to any global downturn. While the bulk of Irish exports go to European Union member-states, areas like eastern Europe, Latin America and Asia are important growth areas.

Eastern Europe has been one of the fastest growing regions for exports in recent years. According to figures from the Irish Trade Board, Irish exports to the Czech Republic, Hungary and Poland have increased fivefold since 1992 from £42 million to £210 million in 1996.

Further east, the Russian market was worth about £225 million to companies exporting from Ireland last year. The largest single export is beef, which accounted for a quarter of all exports to Russia in 1997, although Irish firms are also involved in areas like construction, aviation, telecommunications and consultancy.

Meanwhile, the Japanese market last year took £1.1 billion worth of Irish goods, making it more important than the Northern Ireland or Spanish markets as far as exports from the Republic were concerned.

To date, there are no signs that Irish exports to these regions are suffering unduly. Trade figures for the first five months of the year show Irish exports increased by 30 per cent over the same period in 1997 while first-half exports to countries outside the European Union, including the US and Canada, surged by 39 per cent. Dr Dan McLaughlin, economist at ABN AMRO, says the figures are surprising. But he adds that the types of product being exported from Ireland - such as food for which there is always a market - and the increasing numbers of Irish firms with an export focus appear to be offsetting any short-term negative effects on the demand side.

But exporters are bracing themselves for tougher times ahead, particularly if the contagion continues to spread and sends western markets like the US and Germany, which are exposed to the trouble spots, into reverse.

Dr Noel Cawley, managing director of the Irish Dairy Board, says it is just past the peak time of year for dairy exports but next year could prove tougher, particularly as Irish exports may face stiffer competition from countries like Australia and New Zealand, pushed out of their traditional markets in south-east Asia.

"In the world of dairy marketing and meat marketing, if people are pushed out of one market they go into another. If this doesn't affect volume, it certainly affects price. The whole thing is interlinked," Dr Cawley says.

The meat industry, which accounted for 70 per cent of food exports to Russia last year, is continuing to ship to fulfil the terms of contracts signed before the current crisis but the outlook remains uncertain.

"Trade with Russia hasn't stopped. What has stopped temporarily is the generation of new business," says Mr Owen Brooks, director of international markets with Bord Bia. He expects beef exports to resume eventually, as Russian producers will not be able to meet demand for the more than one million tonnes of meat imported annually and stocks are already running down as winter approaches. But people are waiting for some of the confusion to clear before they start trading again.

Bord Bia does not have figures for how much money is owed to Irish meat exporters, but Mr Brooks says the trade is done in dollars rather than roubles and generally involves an upfront payment of all or part of the money. The current crisis poses problems for multinational as well as indigenous Irish firms. While the pharmaceutical sector may be protected to some extent, as spending on health care cannot easily be dispensed with, the impact on the computer industry worldwide, a sector Ireland is increasingly exposed to, will be closely watched.

Some 35,000 people are now employed in the electronics sector in Ireland, according to IDA Ireland. Second quarter earnings have already confirmed the Asian crisis is taking a toll on many of the blue-chip companies in the sector, so slower growth in eastern Europe and Latin America will be the last thing these firms want to see.

Meantime, although the Irish banking system has little or no loan exposure to the troubled regions, the recent turbulence has already derailed the Irish stock market's rally. The ISEQ index's 14 per cent drop from April's record high has come about mainly on foot of weakness in New York, London and other European markets rather than because of any sector-specific exposure.

Smurfit, Kerry and CRH have small operations in Latin America and AIB and Irish Life are both involved in eastern Europe, but analysts say the exposure of these companies to such regions is small as a proportion of their total business. "I don't think there will be a direct effect on profitability from exposure to those regions," says Mr Robbie Kelleher, head of equity research at Davy Stockbrokers.

He sees the recent market downturn as a correction although he says it is impossible to know how long it will last or how deep it will be. But others fear it could be the beginning of a bear phase in global equity markets, making life more difficult for publicly-quoted companies and investors alike. Economists also note that the global uncertainty does not provide the ideal economic backdrop for next year's launch of the single European currency.

However, every cloud has a silver lining. In this instance, the jitters sweeping worldwide markets and the collapse in commodity prices augur well for the maintenance of low interest rates in the US and Europe. If rates across Europe remain at, or close to current levels, it means Irish interest rates will have further to fall to converge with other countries making up the euro zone. Low interest rates mean low mortgage rates and higher incomes which in turn will ensure that at least one of the Irish economy's main engines - consumer demand - remains on track.