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SARS infecting economies

Hong Kong ambulance
Asian economies are staring at major losses due to the SARS virus.

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MANILA, Philippines (CNN) -- If the SARS epidemic is not under control by September, Asian economies could lose between $12 billion and $28 billion as tourism and investments decline in the region, according to a new report released Friday.

The Asian Development Bank, based in Manila, studied the impact of the Severe Acute Respiratory Syndrome on seven East Asian and Southeast Asian countries, including the regions of Hong Kong and Taiwan.

Hong Kong would suffer the greatest drop in annual gross domestic product, by far, according to the ADB's report.

If the spread of SARS is not controlled by the third quarter of 2003, GDP growth in China would drop 0.2 percentage points to 7 percent, and in Hong Kong it could fall 4 percentage points into negative territory, the report states.

"Unemployment will rise as a result of weakening demand, " said Ifaz Ali, ADB's chief economist. "Of particular concern is the fact that SARS will not only induce hardship for many, but also intensify the poverty faced by the most vulnerable groups in society."

If the illness continues to spread into the end of June, the report says GDP growth could decline 5.3 percent for China (including Hong Kong and Taiwan) and Korea, and 3.4. percent for Southeast Asia -- Indonesia, Malaysia, Philippines, Singapore, and Thailand.

On a positive note, the report says there is a possibility that the economies will receive a boost after the disease is brought under control because people living in the affected areas will immediately start spending money.

However, it could take longer for tourists and investors to return to the region, according to the report.

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