Economist predicts world recession
Morgan Stanley economist cites SARS, war uncertainties as the main causes for pending recession.
April 2, 2003: 1:11 PM EST
NEW YORK (CNN) - One of Wall Street's leading economists is predicting a global recession this year, prompted in large part by fears surrounding Severe Acute Respiratory Syndrome (SARS), the "mystery illness" with cold-like symptoms that is blamed for 78 deaths in 15 countries, CNNfn has learned.
Morgan Stanley's chief economist in the United States, Stephen Roach, will formally advise clients Friday that he's forecasting a world recession in 2003. His previous forecast was for an annual growth rate of 2.5 percent.
Roach told CNNfn that SARS is "just another nail on the coffin for the world economy." And slower global growth, he said, will impact U.S. exports.
"You've got war, SARS, uncertainty, and imbalances that will prevail after the war is over and until a cure for the disease is found," Roach said.
Air Canada (ACNAF: Research, Estimates) blamed the disease for contributing to its financial plight as it filed for bankruptcy Tuesday. An airline spokeswoman said SARS had brought a reduction in flights between Canada and Hong Kong, Beijing, and Shanghai.
Of the 2,223 cases of SARS confirmed by the World Health Organization, 1,898 occurred in mainland China and Hong Kong.
The Centers for Disease Control and Prevention said Tuesday its scientists are 90 percent certain they have identified a new strain of virus that is responsible for SARS.
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--from CNNfn's Fred Katayama |
