A full-blown swine-flu epidemic would plunge the Hong Kong economy further into recession in a possible repeat of the devastating Sars outbreak six years ago, economists and academics have warned. Having experienced the impact of severe acute respiratory syndrome, which emptied hotels and restaurants, shuttered shops and sent the jobless rate past 8 per cent, Hong Kong is especially on edge given the global ramifications of swine flu. Sars was largely confined to Hong Kong, the mainland and Taiwan, with other significant death tolls in Canada and Singapore. Financial markets around the world were rocked yesterday as already jittery investors feared a global outbreak would scupper a possible economic recovery this year. The government estimates the local economy will shrink by 2 to 3 per cent this year, down from growth of 2.5 per cent last year. 'I'm quite worried. If we are hit with a swine-flu outbreak, Hong Kong's economy would probably shrink between 4 and 4.5 per cent this year,' said Terence Chong Tai-leung, associate professor of economics at Chinese University. 'Retailers will feel the impact immediately as people stay at home and don't go out. Unemployment will almost certainly jump to over 8 per cent because many smaller companies will start laying off staff if they don't have any business after one or two months.' Given the heavy financial toll the credit crunch has had on world economies, Professor Chong said Beijing also had less fiscal ammunition to bail Hong Kong out this time, unlike during the Sars crisis six year ago. But Charles Li Kui-wai, associate professor of economics and finance at City University, said it was still too early to say whether swine flu would be as devastating to the economy as Sars. 'There are still uncertainties about how fast the flu is spreading and the availability of a vaccine.' What is certain is that the tourism and hospitality trades will be hurt. The number of visitors from the Americas in February - just over 101,000 - was already down more than 11 per cent year on year. The Tourism Board was already expecting long-haul travellers to shy away from Asia amid the global downturn. If an outbreak happened in the region, travel within Asia would also be affected, Hong Kong Hotels Association executive director James Lu Shien-kwai, said.