Australia is starting to calculate the economic fallout from the Bali bombing with tourism among the first to suffer.

The A$15.4 billion ($8.5 billion) inbound tourism industry is bracing itself for a slowdown as western travellers follow advice to leave Indonesia and avoid anywhere in South-east Asia.

After last week's attack, Australian government intelligence received a warning of a "generic threat" to westerners in Indonesia. Bali is not a major tourist hub, but Singapore and Bangkok are stopovers on the most popular route from Europe to Australia.

Any disruption to the flow of tourists to them would have a severe knock-on effect on Australia. The government has substantially upgraded warnings about travelling to Thailand, Singapore, Laos, Malaysia, Burma, Brunei, Cambodia, East Timor and the Philippines.

On Friday, telecoms giant Telstra became the first Australian company to pull staff out of Indonesia on government advice. A Telstra spokesman stressed that only a handful of people were involved.

The director of the Jakarta-based Indonesian-Australian Business Council, Vic Halin, expects most Australian companies to remain in Indonesia, Australia's 10th largest trading partner, but said there was confusion about the latest travel advice for expatriate staff.

For most Australian companies in Indonesia, the bombing simply adds to Indonesia's already high-risk profile. Mining and construction companies such as Rio Tinto, Newcrest Mining, Leighton Holdings and Clough are all unlikely to withdraw expatriates, al-though some have activated emergency plans.

Bali and other islands in the Indonesian archipelago are popular and cheap destinations for Australian families, backpackers and surfers. According to the Australian Bureau of Statistics, in the seven months to July this year, 144,400 Australians visited Indonesia, amounting to 7.5 percent of outbound tourists.

The terrorist attack is now expected to put a number of Bali travel specialists out of business. One of the first casualties was the start-up Bali tourism airline, Air Paradise International, which announced on Monday that it had cancelled inaugural flights to Bali from Perth and Melbourne planned for later this month.

Qantas and Garuda had been heavily discounting Bali packages in anticipation of the competition. The bombing on 13 October is seen as Australia's 11 September and while the political and security issues it raises for the region are immense, the economic fallout is unclear.

The Australian government is likely further to increase spending on border protection and other security measures, increasing pressure on a budget that dipped into the red in the last financial year.

The Australian economy is forecast to grow by 3.2 percent this financial year - the fastest in the developed world - but drought, the stalled US economic recovery and fears about prolonged regional instability are expected to slow the rate next year.

John Edwards, HSBC's chief economist, says commentators are wary of ascribing economic impact to terrorist events after the fears that the World Trade Centre attacks would plunge the US into recession proved unfounded.

Early last week Australian economists were warning that the Bali bombing would have a temporary negative effect on the Australian dollar, equities and debt markets, but there has been no discernible reaction so far.

Qantas and discount travel group Flight Centre were regarded as the most vulnerable, but Qantas shares have bounced about 15 percent off near one-year lows over the past fortnight as speculation mounts that a NZ$350 million ($169 million) deal to buy 25 percent of Air New Zealand is only weeks away.