Fears are on the rise that the swine flu outbreak could jeopardize the already fragile global economy and reverse its initial recovery.

Mexico, which is at the epicenter of the deadly disease, has so far reported a total of 1,995 suspected cases and at least 149 suspected swine flu deaths. Its northern neighbor, the United States, reported 42 confirmed cases, including 28 at one New York City school.

Confirmed or suspected cases are also found in Canada, Scotland, New Zealand, Spain, France and Israel.

Tourism in North America is the first to feel the chill as people chose to stay at home and governments advise their citizens to avoid non-vital travels to the region.

Many airlines issued polices waiving usual penalties for changing reservations for anyone traveling to, from, or through Mexico, and travel agencies across Asia and Europe have cancelled tours to the country.

TUI Travel, Europe's biggest tour operator, said it was suspending all trips to Mexico City through May 4, and Japan's largest tour agency JTB Corp. has suspended Mexico tours until June 30.

The U.S. government advised its people against most travels to Mexico and stepped up border checks. EU Health Commissioner Androulla Vassiliou also instructed Europeans to avoid nonessential travels to both Mexico and parts of the United States.

Britain, France and Germany have also issued similar notices strongly recommending their citizens not to travel to Mexico.

Major epidemic outbreaks usually mean dwindling business opportunities and reluctant trade. In 2008, a flu pandemic cost US$3 trillion and result in a nearly 5-percent drop in world gross domestic product, according to the World Bank data.

Such a scenario has been more unbearable as the world's countries struggle to reboot their economies. Analysts warned that measures to contain the epidemic could eat up gains in economic recovery.

The World Health Organization (WHO) on Monday raised its pandemic alert level from Phase 3 to Phase 4, which means the swine flu virus can cause sustained human-to-human transmission and "community-level outbreaks."

Observers said the swine flu could have a multifaceted impact on the global economy, and pinches could be felt for not only in tourism, transportation, but food and other supporting industries.

Brain Bethune, economist at IHS Global Insight, said, "You can argue that the swine flu amplifies the downside risks to the economy," reversing his remarks earlier this month that the world economy had "gone through the most terrible part of the recession."