The countries hit hardest by the devastating tidal wave that lashed the Indian Ocean will experience slower economic growth in 2005, but the effects will not be severe, a new report has said.
The survey by Economist Intelligence Unit entitled "Asia's tsunami: the Impact" assesses the political and economic implications of one of the worst natural disasters in decades.
According to its key findings, Indonesia's economy will be less affected, with 2005 growth slipping from a forecast 5.7 per cent previously to 5.4 per cent now.
The key challenge for Indonesia could be on the political front: dealing swiftly and efficiently with the disaster will be an important test for the new President, Susilo Bambang Yudhoyono.
Sri Lanka will see the sharpest reduction in economic output, with real gross domestic product to decline from previously expected 5.6 per cent to 4.2 per cent in 2005. The tourism and fishing industries will be hardest hit. By virtue of its small size, the Sri Lankan economy is less well-equipped to absorb the disaster.
Thailand's economy will also suffer, with 2005 GDP now forecast to grow by 4.3 per cent instead of 5.5 per cent.
"We are expecting a substantial decline in private consumption in the first quarter of the year as tourism accounts for at least 10 per cent of employment in Thailand and the disruption is likely to reduce personal income and hence consumer spending," the report said.
© 2025