You are here
Too early to tell if Zika will hit S'pore economy hard, say observers
THE first clear indications of the impact of the Zika virus in Singapore may surface in a little over two weeks, in the form of the turnout at the Formula One (F1) Singapore Grand Prix to be held from Sept 16 to 18.
Gerald Wong, head of Singapore research at Credit Suisse, told The Business Times on Tuesday: "Tourist arrival numbers will be sensitive to situations like this. If there are significant cancellations in turnout for the F1 race, that would be a potential indicator for the virus' impact on the larger economy."
Already, Australia, Taiwan and the United Kingdom have issued travel advisories for travellers to Singapore.
But for now, observers predict that the economic impact will be minimal, even as comparisons are being drawn to the outbreak of severe acute respiratory syndrome (Sars) in Singapore in 2003.
Meanwhile, new cases were detected on Tuesday, Day 4 since news of the first locally-transmitted infectionwas made public.
Philippe Guibert, regional medical director of medical and travel risk services company International SOS, referring to the Sars outbreak, said it was a good benchmark of the real-world impact of public health scares. Back then, mobility and business decisions were severely hit here.
"But in terms of transmission, mortality and potential consequences, Zika is really far from Sars; we're not talking about the same disease here," he told BT on Tuesday.
Singapore has been grappling with dozens of newly-reported cases of Zika infection ever since the first locally-transmitted case was reported last Saturday.
Another 26 locally-transmitted cases were reported by noon on Tuesday, taking the total to 82 since Saturday. They are mostly clustered around Aljunied Crescent and Sims Drive in south-eastern Singapore, and the Ministry of Health has previously said that it expects to identify more positive cases.
The virus is primarily transmitted by the Aedes mosquito. While a Zika infection presents mild symptoms in adults, it is generally thought to cause microcephaly, or an abnormal smallness of the head, in foetuses.
Foreign and domestic reactions to developments here have been swift.
Following Saturday's case, Malaysia stepped up precautionary measures to screen air travellers and those entering Malaysia by bus via Woodlands and the Second Link.
At home, there are reports saying that an expectant mother residing in Sims Drive has moved in with a relative in Woodlands in the north.
Observers, in drawing parallels with what Singapore went through during the Sars outbreak, said that these latest responses might hint at how tourism might be affected.
When Sars took a foothold here in mid-March 2003, tourist arrivals fell 14.5 per cent year on year for that month. Two months later, the year-on-year drop was 70.7 per cent.
During the April-June quarter, when the full impact was felt, the economy contracted sharply by 4.2 per cent year-on-year, BT reported. After the F1 race in mid-September, a clearer picture of Zika's impact on the economy could come in by November, say economists; this would be when tourist arrivals and retail sales figures for September are released.
Said Song Seng Wun, CIMB Private Banking economist: "Are tourists staying away? Will people buy more repellent at pharmacies? Zika's impact will be clearer when the September numbers come in - bearing in mind that the haze and F1 will also affect those numbers."
The reason that observers say now that the economic impact will be minimal is that anecdotally, economic activity among residents and travellers seems to be going on as usual.
To get a sense of how the virus might affect inbound tourism, one can look at how Thailand is coping, said Credit Suisse's Mr Wong.
Thailand has had 96 individuals come down with the virus between January to June, say media reports, but tourism in the Land of Smiles seems to be in "business as usual" mode: 19.5 million visitors arrived between January and July this year, a 11.9 per cent rise from the corresponding period last year.
However, this does not mean that the government and businesses should not actively try to assuage concerns, said observers.
Brian Tan, economist at Nomura, said: "Communication is important to avoid situations like this having a large economic impact. The challenge Singapore has is to communicate to tourists that this is not country-wide issue, but limited to a localised area in Aljunied."
But though the Zika virus' spread in Singapore has yet to make an economic impact, observers are not dismissing all chances of it turning into a crisis. Dr Guibert from International SOS, for example, points out that the virus is here to stay - and this opens up avenues for it to have a deeper impact.
Noting that both dengue fever and Zika virus are spread by the same Aedes mosquito, he said that eradication of the Zika virus is extremely difficult. A better way to control the virus' spread would be to limit transmission.
"It's too early to tell whether the virus will have a large impact in Singapore," he said, adding: "But for sure, it's not the same outbreak that we saw in 2003 with Sars."
For all our Zika coverage, go to