Flu tests Asia's 2004 outlook
Thailand's market is lower in Monday trade.
Nations hit by bird fluS. Korea
Suspected bird flu
Taiwan (different strain)
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(CNN) -- Asia's bright economic outlook for 2004 is facing its first big test of the year as bird flu spreads across the region.
Thailand and Vietnam, viewed as two of Asia's star performers this year with likely growth rates of around 7 percent, face the heaviest impact.
Along with the human lives already lost to the deadly disease, there is potentially a huge economic cost -- initially to farmers whose poultry stocks have been slaughtered, and more broadly to industries such as tourism and business services.
Thailand, the world's fourth biggest poultry exporter and the site of the seventh confirmed human death, is in the eye of the storm.
It has already lost its two biggest markets, the EU and Japan, as governments ban chicken imports in response to the fears of consumers already made nervous by the SARS epidemic that swept out from China last year.
China on Sunday joined the list of countries unwilling to accept Thai chickens. The World Health Organization has already warned of the threat the bird flu may pose if it gets a grip in the world's most populous country.
Thai Prime Minister Thaksin Shinawatra has promised compensation to poultry growers, but the loss of market confidence among global consumers will be hard to regain.
Before the outbreak of the disease, Thailand was being viewed as one of the best prospects among Asian economies in 2004, with growth tipped to reach almost 7 percent. Vietnam also was expected to post 7 percent growth.
So far, seven people -- one in Thailand and six in Vietnam -- are confirmed dead from the bird flu.
The disease has infected millions of chicken in Thailand, Vietnam, Cambodia, South Korea, Japan, Taiwan and Indonesia.
So far, nine million chickens had been slaughtered in Thailand and 1.8 million birds have been killed in South Korea since the outbreak began last December.
Farmers in Taiwan have also been forced to cull thousands of sick birds, after they were found to be suffering from another strain of the avian flu.
The economic impact is spreading, with Japan widening its ban Monday to chicken and chicken products from Indonesia and Cambodia.
The agriculture ministry said it was suspending imports from those two countries until they confirm they have the disease under control.
People are believed to be infected through direct contact with sick birds, and there has been no evidence yet of human-to-human transmission.
"The more widespread it becomes, the greater the possibility that the (bird flu) virus could become altered and become more of a threat to the human population," WHO spokesman Bob Dietz said.
On the stock market front, Bangkok's SET composite index is down 1.3 percent Monday to 774.47.
Reuters news agency reported that dealers in Singapore say the market has largely ignored news that bird flu had claimed its first human victim in Thailand and that the contagious disease had spread to Indonesia.
"The bird flu may have a positive impact as funds may choose to park their money here temporarily," it quoted a sales director with a European brokerage as saying.