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Flu could further hurt sick economy
Mexican finance minister warns of "high potential for disruption" to economy.
Last Modified: 27 Apr 2009 07:17 GMT

Authorities have banned large gatherings for at least 10 days in Mexico, affecting industries [AFP]

Mexico's finance minister has warned that the outbreak of swine flu could have a negative impact on the country's economy.

Calling it a "very serious matter" that has a "high potential for disruption", Agustin Carstens said on Sunday that the outbreak "can have an important impact on the economy".

But he added that "the most important impact is the one on human life and human well being" and that it was too soon to access the potential damage.

"At this stage, without ignoring that this is a very serious matter and that it has a high potential for disruption, I would say that it's early to give a more concrete opinion," he said.

Speaking at a news conference after a meeting of the International Monetary Fund (IMF) and World Bank's joint Development Committee in Washington, Carstens also said there would be no "structural" but only "transitory" damage to the economy.

Tourist warnings

The epidemic, which has claimed at least 22 lives and may have been responsible for 64 more, threatens to deepen Mexico's economic decline amid slumping US demand for Mexican exports.

The Mexican economy shrank 1.6 per cent in the fourth quarter of last year and may have contracted another 4.2 per cent in the first three months of this year, according to a central bank survey of 32 economists published in early April.

While no foreign government has banned travel to Mexico, several countries such as South Korea and Hong Kong have already advised citizens not to go there.

That could hurt a tourism sector that brought in $13.3bn in 2008 as Mexico's third-largest source of foreign currency behind oil exports and remittances from Mexicans abroad.

The World Bank said on Sunday that it was giving Mexico an immediate loan of $25m to help with medicine and medical equipment, and added that it would provide a further $180m to help the country set up operations to deal with the outbreak.

Source:
Agencies
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