Financial Crisis And Its Effects On Economic Growth

The late half of 1997 and the early parts of 1998 presented the world with one of the world’s most famous financial crises. This financial crisis proved to be detrimental mainly to the south-eastern Asian area, including South Korea, Thailand, Malaysia, Singapore, Hong Kong and Indonesia. The aforementioned south-eastern states recorded astounding economic growth in the preceding decade. The downfall of the economy caused a domino effect in the local markets and currency markets of each country. The nations’ leaders, as a result, had to request assistance from the IMF. Politics were important in creating the financial boom, but they were also guilty of the subsequent consequences. Similar to a number of financial crises in the past, the Asian financial crisis came to be as a result of unexpected economic growth. The countries were all under the influence of a number of different economic criteria, such as cheap yet fairly well educated labour, lowered barriers to trade, and economies based heavily on exports. Even Malaysia enjoyed bountiful foreign direct investment. All of these elements came together to make Asia dominant force in exports. This was proven by the fact that none of the countries affected by the crisis experienced of export growth lower than 12% between 1990 and 1996. Not only did these countries experience rapid growth in exports, the nature of the exports where product types are concerned also changed. The products evolved from simple products likeShow MoreRelatedWhy India Recovered Quickly From The 2008 Global Crisis Essay1594 Words   |  7 Pagesrecovered quickly from the 2008 global crisis? Vivek Shah MBA AF 629 December 12, 2016 Introduction It’s the most heard term about the global economy in the recent years and it’s the year we have been always hearing about its 2008. 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