Economic Impact of SARS in Hong Kong Economic Impact of SARS: The Case of Hong Kong* Alan Siu Abstract Associate Professor SARS is the first deadly infectious disease of the 21st century. It School of Economics and Finance started in the Chinese province of Guangdong in November The University of Hong Kong 2002, and by August 2003, it had spread to 29 countries and 3 re- K. K. Leung Building Room 1021 gions, with a cumulative total of 8,422 cases and 916 deaths. This Pokfulam Road paper describes the spread of the disease in Hong Kong and dis- Hong Kong, SAR, China cusses its impact on the economy. SARS was an unexpected nega-
[email protected] tive shock. The most significant negative effects were on the de- Y.C. Richard Wong mand side, with local consumption and the export of services Professor of Economics and related to tourism and air travel severely affected in the short run. Dean Faculty of Business and The economy did not experience a supply shock, as the manufac- Economics turing base in the Pearl River Delta was unaffected, and goods The University of Hong Kong Meng Wah Complex, 7/F continued to be exported through Hong Kong normally. Initial Pokfulam Road alarmist reports and estimates about the negative economic im- Hong Kong, SAR, China pacts were not borne out. Fear and panic subsided quickly once
[email protected] the outbreak was under control, and the economy rebounded rapidly. 1. Introduction The World Health Organization (WHO) issued a global alert about a deadly new infectious disease on 12 March 2003.