East Asia and Pacific Update, December 2008 : East Asia - Navigating the Perfect Storm

As the global economy finds itself in the worst financial crisis since the great depression, the East Asia and Pacific region has not been spared the full fury of the economic storm. The surge and subsequent drop in food and fuel prices was followe...

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Main Author:	World Bank
Format:	Serial
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	ECONOMIC GROWTH ECONOMIC OUTLOOK FINANCIAL CRISIS CAPITAL FLOWS ECONOMIC SHOCK FISCAL TRENDS POVERTY REDUCTION POLICY COORDINATION BANKING
Online Access:	http://documents.worldbank.org/curated/en/593791468244552163/East-Asia-navigating-the-perfect-storm http://hdl.handle.net/10986/33512

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recordtype	oai_dc
spelling	okr-10986-335122021-04-23T14:05:20Z East Asia and Pacific Update, December 2008 : East Asia - Navigating the Perfect Storm World Bank ECONOMIC GROWTH ECONOMIC OUTLOOK FINANCIAL CRISIS CAPITAL FLOWS ECONOMIC SHOCK FISCAL TRENDS POVERTY REDUCTION POLICY COORDINATION BANKING As the global economy finds itself in the worst financial crisis since the great depression, the East Asia and Pacific region has not been spared the full fury of the economic storm. The surge and subsequent drop in food and fuel prices was followed by the intensification in the financial crisis that began in mid- 2007 in the U.S., deepened through the first half of 2008, and took a sharp turn for the worse after September 15. Even as East Asian policymakers were battling the previous crisis in late 2007 and early 2008 - the rise in inflation following the steep increases in food and fuel prices they were confronted by sudden falls in equity prices and exchange rates, sharp increases in short-term interest rates, and an abrupt deceleration in export growth. The epicenter of the storm was in the developed countries, but its reach spread quickly across the globe. The failure of important financial institutions in the major financial systems froze interbank and credit markets around the world and revised the price of risk upward, triggering a global liquidity shortage. The ensuing search for liquidity worldwide prompted, among other things, the sale of equity and debt securities and the withdrawal of capital from emerging markets, destabilizing banking systems far from the center of the crisis. Boosts to liquidity and injections of capital in financial institutions by developed country authorities may avert a systemic meltdown of financial markets, but heightened risk aversion and an ongoing deleveraging across the world is causing capital to retreat from developing countries and the cost of financing to rise. The loss of trust, breakdown in financial markets, and curtailment of bank loans have hit investment, production, and trade, causing global growth to slow rapidly. Japan and Europe are already in recession, and the US is expected to follow soon. All three are expected to contract further in 2009, dampening import demand and resulting in the first decline in world trade volumes in a quarter century. 2020-03-31T20:49:03Z 2020-03-31T20:49:03Z 2008-12 Serial http://documents.worldbank.org/curated/en/593791468244552163/East-Asia-navigating-the-perfect-storm http://hdl.handle.net/10986/33512 English East Asia and Pacific Economic Update; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper East Asia and Pacific East Asia Oceania
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ECONOMIC GROWTH ECONOMIC OUTLOOK FINANCIAL CRISIS CAPITAL FLOWS ECONOMIC SHOCK FISCAL TRENDS POVERTY REDUCTION POLICY COORDINATION BANKING
spellingShingle	ECONOMIC GROWTH ECONOMIC OUTLOOK FINANCIAL CRISIS CAPITAL FLOWS ECONOMIC SHOCK FISCAL TRENDS POVERTY REDUCTION POLICY COORDINATION BANKING World Bank East Asia and Pacific Update, December 2008 : East Asia - Navigating the Perfect Storm
geographic_facet	East Asia and Pacific East Asia Oceania
relation	East Asia and Pacific Economic Update;
description	As the global economy finds itself in the worst financial crisis since the great depression, the East Asia and Pacific region has not been spared the full fury of the economic storm. The surge and subsequent drop in food and fuel prices was followed by the intensification in the financial crisis that began in mid- 2007 in the U.S., deepened through the first half of 2008, and took a sharp turn for the worse after September 15. Even as East Asian policymakers were battling the previous crisis in late 2007 and early 2008 - the rise in inflation following the steep increases in food and fuel prices they were confronted by sudden falls in equity prices and exchange rates, sharp increases in short-term interest rates, and an abrupt deceleration in export growth. The epicenter of the storm was in the developed countries, but its reach spread quickly across the globe. The failure of important financial institutions in the major financial systems froze interbank and credit markets around the world and revised the price of risk upward, triggering a global liquidity shortage. The ensuing search for liquidity worldwide prompted, among other things, the sale of equity and debt securities and the withdrawal of capital from emerging markets, destabilizing banking systems far from the center of the crisis. Boosts to liquidity and injections of capital in financial institutions by developed country authorities may avert a systemic meltdown of financial markets, but heightened risk aversion and an ongoing deleveraging across the world is causing capital to retreat from developing countries and the cost of financing to rise. The loss of trust, breakdown in financial markets, and curtailment of bank loans have hit investment, production, and trade, causing global growth to slow rapidly. Japan and Europe are already in recession, and the US is expected to follow soon. All three are expected to contract further in 2009, dampening import demand and resulting in the first decline in world trade volumes in a quarter century.
format	Serial
author	World Bank
author_facet	World Bank
author_sort	World Bank
title	East Asia and Pacific Update, December 2008 : East Asia - Navigating the Perfect Storm
title_short	East Asia and Pacific Update, December 2008 : East Asia - Navigating the Perfect Storm
title_full	East Asia and Pacific Update, December 2008 : East Asia - Navigating the Perfect Storm
title_fullStr	East Asia and Pacific Update, December 2008 : East Asia - Navigating the Perfect Storm
title_full_unstemmed	East Asia and Pacific Update, December 2008 : East Asia - Navigating the Perfect Storm
title_sort	east asia and pacific update, december 2008 : east asia - navigating the perfect storm
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/593791468244552163/East-Asia-navigating-the-perfect-storm http://hdl.handle.net/10986/33512
_version_	1764478907686322176

East Asia and Pacific Update, December 2008 : East Asia - Navigating the Perfect Storm

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