Some Asian economies are facing one of their biggest challenges since the 1997-98 financial crisis - a virus that is spreading around the world, keeping tourists away and shoppers at home.
Investment house Morgan Stanley said today it has reduced its 2003 economic forecast for East Asia excluding Japan to 4.5 per cent from 5.1 per cent due to the viral outbreak.
The virus, which causes Severe Acute Respiratory Syndrome (SARS), has claimed at least 75 lives worldwide over the last two weeks, with mainland China reporting 46 deaths and 16 fatalities in Hong Kong. More than 2,000 people have been infected around the world as airline passengers spread the disease.
"We assume a 15 per cent decline in this year's tourism revenue. If SARS lasts for two quarters, our estimate of GDP impact doubles," said Mr Andy Xie, chief economist for Asia-Pacific at Morgan Stanley in a research note.
Mr Xie said the current health crisis was the "gravest" economic problem to hit Asia since regional financial turmoil in 1997/98.
Goldman Sachs said it was lowering its growth forecast for Hong Kong's real gross domestic product to 1.7 per cent for 2003 from an original estimate of three per cent. Goldman said it expects tourism expenditures to drop 65 per cent, while locals are seen spending about 20 per cent less.
Restaurants and gymnasiums in central Hong Kong, which are typically packed on weekday evenings, have been empty and most commuters in Hong Kong's crowded subway trains and buses have taken to wearing surgical face masks.
Tourism, which accounts for about six per cent of Hong Kong's gross domestic product and has been one of the best performing sectors, has been the single hardest hit sector of the economy since the outbreak began.
Elsewhere, Malaysia reported a three per cent drop in daily passenger arrivals at the country's main Kuala Lumpur International Airport "seven days before and after" SARS was detected in the region.
Singapore, which has so far recorded four deaths from the disease, has seen sales of thermometers, disinfectants, vitamins and herbal pills rocket, while shoppers are increasingly buying goods online to avoid public spaces, according to NTUC Fairprice, one of the nation's biggest grocery outlets.
In Hong Kong, bottles of Yakult, a sweet Japanese health drink containing live bacteria have been flying off grocers' shelves, with many believing it will somehow protect them from the disease.