Beyond the Crisis: Emerging Trends and Challenges

Abstract

But despite welcome recovery, the effect of the crisis has not been completely erased. Growth has settled on a lower trajectory. Comparing the period 2000–2006 with 1990–1996, growth has slipped by an average of 2.5% a year in the five countries that were most directly affected (Indonesia, Korea, Malaysia, Philippines, and Thailand). The persistence of such a gap implies large permanent losses of income compared with precrisis trends. Indeed, if the impacts of the crisis on income levels are to prove transitory, a period of faster than “normal” growth would be required to compensate for the output “lost” during the crisis years.