A report has praised the resilience of Asia's economies, which since the Asian financial crisis of 15 years ago have weathered the global financial crisis and a spate of natural disasters. The report by Halifax Share Dealing, an arm of the UK's Halifax Bank, which is owned by Lloyds Banking Group, examined the economic performance of affected economies since the Asian crisis of 1997, including the global financial crisis of 2007-09.
“The Asian financial crisis of 1997 was triggered by the coming together of conditions that created considerable financial and economic instability in the region. A combination of reduced short-term interest rates, lower exchange rates and extensive financial reforms have subsequently boosted economic growth. Stock market indices in Indonesia, Malaysia, the Philippines and Thailand have all recently touched record highs," said Damian Stansfield, managing director of Halifax Share Dealing.
"Many of the policy changes that took place after 1997 have stood the region in good stead during the recent global financial crisis. While much of the global economy suffers from low economic growth, high unemployment and high debt levels, Asian economies have gone from strength to strength.”
The Asian financial crisis in 1997 tipped the region into recession and resulted in steep stock market falls. However, stock markets in south-east Asian countries affected subsequently recovered, supported by financial market reforms and sustained economic growth. Asian stock markets have recovered to pre-2007 levels unlike those in the West. The Indonesian stock market index is now 440% above July 1997 levels. In South Korea, share prices are currently 145% higher. The Philippines (86%), Malaysia (48%) and Singapore (44%) are all also significantly higher than in 1997.
Economic growth in south-east Asian economies fell from an average of 8.4% a year in the five years before the 1997 crisis to -1.8% a year in 1997-98. But since 1999, economies in the region have seen average annual growth rates of about 5%. Despite slowing in 2009, when the global financial crisis took hold, economic growth in the region has remained robust and south-east Asian economies have grown by an average 4.2% a year since 2009. This strong performance has happened despite a number of major natural disasters hitting the region and economic stagnation in the developed economies.