Although many economists consider the Asian economic collapse to have begun in Thailand, conditions throughout the region meant that other countries? economies were destabilized to the extent that they quickly followed Thailand.
Throughout the early 1990s, growth in Southeast Asia attracted much foreign capital. However, by 1995 and 1996, Thailand?s current account deficit had grown (from 5.7% in ?93 to 8.5% in ?96 [Pesenti et al., 1998]). When domestic production slowed, this account imbalance represented an even greater percentage, when compared to GDP. Much of the instability in Thailand?s economy was brought about by heavy short-term borrowing that required stringent debt maintenance. A boom in real estate and the Thai stock market attracted foreign speculation that could not be sustained in the face of investor doubts. The Thai government attempted to shore up shaky investor confidence by officially backing the financial in...
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...r 1997 are from the Economist Intelligence Unit Country Report, 2nd quarter 1998.
Table 2. Non-Performing Loans (as proportion of total lending in 1996)
Hong Kong 3%
Source: 1997 BIS Annual Report; Jardine Fleming.
Table 3. Debt Service plus Short-Term Debt, World Bank Data (% of foreign reserves ).
1990 1991 1992 1993 1994 1995 1996
Korea 127.4 125.9 110.4 105.7 84.9 204.9 243.3
Indonesia 282.9 278.8 292.0 284.8 278.0 309.2 294.2
Malaysia 64.0 45.9 45.6 42.4 48.7 55.9 69.3
Philippines 867.6 257.0 217.1 212.6 172.0 166.6 137.1
Thailand 102.4 99.3 101.3 120.3 126.6 138.1 122.6
Hong Kong 30.5 26.9 22.8 20.6 22.0 16.8
China 55.3 43.7 108.6 113.7 54.1 49.6 38.5
Taiwan 23.9 22.3 23.1 25.2 23.7 24.2
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