While the consequences of the war in Iraq dominated Asian consumer sentiment in March, this month's Asian Consumer Growth Prospects Index (April 2003) reinforces that SARS has emerged as an even greater threat to consumer spending in Asia for the next 12 months. For the first time since the commencement of the index, China has suffered two significant 'downgrades' in a row.

The Asian Consumer Growth Prospects Index is a monthly index and short analysis of the prospects for Asian consumer growth in the next 12 months based on pertinent secondary economic indicies as well as the views of a panel of consumer trend observers in Asia. It has been running now for over 12 months.

Almost all of the 12 Asian economies surveyed experienced a drop in the index, with Singapore and Hong Kong the most effected. The downturn was not unexpected, with government figures in both countries predicting major impact on economic growth for the next 12 months. Even in countries not so directly affected by SARS at present such as Thailand and Malaysia are feeling major effects through a dramatic downturn in the previously relatively bouyant regional tourism sector as countries impose travel bans and screening for tourists from affected countries.

Today both ING and Merrill Lynch both downgraded Hong Kong in the wake of SARS developments as new cases are reported, and there are no signs yet that the outbreak has peaked in the SAR and China. The latter also downgraded the aviation segment worldwide.