According to Swiss banking giant Credit Suisse, the economies like Hong Kong, Malaysia, Singapore and Thailand which have considerable tourism, retail and transportation sectors are most susceptible to a downfall from swine flu pandemic.|
Singapore economy may have faced worst times with deepest contraction in first quarter but a new threat is haunting with the outbreak of swine flu epidemic. The economy was first to be hit hard by recession and is expected to shrink by about 6-9percent this year.
Anxiety due to global swine flu crisis together with deteriorating health of US banks have diminished hopes that the financial system would stabilize. If swine flu pandemic forces people to stay indoor, private consumption which is a key driver for economic growth after fall in exports, would suffer. The economic consequences of consumers and travelers staying back at their homes will most likely be much bigger than the expenditure on fighting the virus.
Weak global industrial demand would lead manufacturing industry to settle down for a much lower level of production than what was in pre-crisis period. As manufacturing sector contracts, the overall job market is set to contract further with the exception being construction only attributed to government run projects. Shares of Singapore have fallen by about 4percent last week due to fear of reduction in travel due to swine flu outbreak. Although Singapore is a regional financial and wealth management center, lay offs are on the move in banks. Moving to petro-chemical industry, with companies such as Exxon Mobil and Royal Dutch setting up plants in Singapore, excess global supplies of petrochemicals would affect chemical producers in Singapore due to overcapacity.