Severe Acute Respiratory Syndrome (SARS) is a deadly atypical pneumonia that became publicly recognized at the end of February 2003. It first appeared in the Chinese province of Guangdong in November 2002 and spread to Hong Kong during late February. By mid-June 2003, the SARS virus had infected around 8500 people worldwide and caused around 800 deaths. SARS has largely affected the greater catering China area. In mid-June 2003, about 63% of the cases occurred in China, with 85% in China and Hong Kong together. The third largest outbreak has been in Taiwan. Canada and Singapore also experienced significant outbreaks.
The Economic Impact of SARS:
In economic terms, SARS represents a crisis of confidence and a demand shock that hit East Asia, especially China, hard. This occurred at a time when East Asian growth prospects were already clouded by geopolitical uncertainties and high oil prices, the stalling in technology exports, and overall weak economic growth in major industrialized economies. GDP growth slowed significantly in a number of East Asian economies in the first quarter of 2003.
Fear of contracting SARS influenced the behavior of individuals, making them avoid public places, travel and face to face contact. In Hong Kong, Singapore, and parts of China, schools closed, meetings and conventions were postponed or unattended, while restaurants and shopping malls experienced declining patronage. As a consequence, consumption expenditure and especially the consumption of services fell sharply.