Thursday, July 05, 2007

Asian Economies Show Growth!

Asian economies show growth, stability 10 years after crisis
Updated : 05-07-2007 Media : The Edge

Asian economies have recovered their growth and stability, 10 years since the Asian financial crisis, sparked by the Thai baht's devaluation in July 1997, Moody's Investors Service said on July 5.

The crisis resulted in the region's economies and markets experiencing huge downturns and shake-outs in confidence.

However, some of the hallmarks of this new landscape include supportive macro-economic factors, such as record foreign exchange reserves, current account surpluses and moderate inflation, Moody's said.

"Regulation and corporate governance have improved, while foreign exchange regimes have become much more flexible," it said.

Furthermore, the region's banking systems have undergone significant changes, including achievement of the healthiest credit metrics in a decade and the establishment of more sophisticated and rigorous risk management systems, it added.

Moody's ratings for individual banking systems in Asia are either stable or stable to positive.

A replay of 1997 is unlikely, given the changes which have occurred. It was also important to note that Asia had overcome other shocks since July 1997, including the tech meltdown in 2000, the terrorist attacks of September 11, the Bali bombings, the SARS scare and more recently bird flu.

However, while there was much to feel good about, complacency and searches for new paradigms need to be eschewed, it said.

"Structural deficiencies remain," it said, adding that reforms must continue.

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