LDN - Health and Fitness

Zika could impact slowing economy, Singapore central bank chief says

[September 06, 2016] By Anshuman Daga and Marius Zaharia

SINGAPORE (Reuters) - A Zika outbreak in Singapore could have a small impact on the almost $300 billion economy, the central bank chief said on Tuesday, as the mosquito-borne virus spreads across the global financial and transit hub.

Ravi Menon, managing director of the Monetary Authority of Singapore, did not give further details, but the outbreak coincides with a dip in overall exports and growth in the trade-dependent economy. Growth is also slowing in China, Singapore's main overseas market.

"It's too early to tell. I would say early indications are there could be some small impact, but it's not likely to be significant from an overall economy outcome," Menon told reporters when asked about the impact of Zika.

"But really, it's still early days," he said at an event hosted by the Foreign Correspondents Association in Singapore.

Small, tropical Singapore reported its first locally infected Zika patient on Aug. 27 and since then, the number of reported infections has exceeded 250.

Health officials say this figure will rise, as the Aedes mosquitoes that carry the virus are all over the island, and hospitals have stopped isolating patients.

Last month, Singapore narrowed its economic growth forecast for the year to 1-2 percent from 1-3 percent growth previously expected, citing concerns over Brexit and weaker global demand.

Economists said tourism and retail would be the areas most affected by Zika, which could in turn hold back growth. Tourism arrivals in the first six months of the year have increased 12.5 percent from a year ago, official statistics show.

"Tourism is about voluntary trips and this is going to have a dent," said Trinh Nguyen, senior economist for emerging-market Asia at French investment bank Natixis SA in Hong Kong.

"Zika will impact sentiment and people's already low propensity to consume."

SLOWER SALES

Retail sales excluding motor vehicles fell year-on-year in June for the fifth straight month, as worries about the sluggish global economy drove Singaporeans to cut back on spending.

[to top of second column]

Singapore is due to host the Formula One motor-racing Grand Prix, a major sporting and tourist draw, next week. Promoters of the race say preparations were going on as usual, and the Tourism Board has also said Singapore remains a safe destination.

Chan Brothers Travel, one of Singapore's biggest travel agencies, told Reuters there had been no cancellations but new bookings may slow down.

While most people experience mild symptoms, Zika infections in pregnant women have been shown to cause microcephaly, a severe birth defect in which the head and brain are undersized. In adults, it can cause a rare neurological syndrome called Guillain-Barre.

Zika is also affecting large parts of Latin America and the Caribbean, with Brazil the hardest hit so far. In Southeast Asia, Malaysia, the Philippines and Thailand are among the nations that have reported Zika infections.

Regional health experts said a lack of adequate testing meant the spread of Zika was likely to remain significantly under-reported.

(Additional reporting by Masayuki Kitano, Fathin Ungku and Saeed Azhar; Editing by Miral Fahmy, Robert Birsel)

Back to top