BIS Review 1/2000  6  The available evidence clearly indicates that the Asian developing countries experienced sharper GDP declines, more severe current account adjustment, and a steeper falloff in private capital flows during the recent crisis than did their Latin American counterparts. I will now consider four broad hypotheses that may account for the differential impact of the crisis on the two regions.
First, were macroeconomic conditions in Asia in worse shape than those in Latin America? Asia’s growth performance in the years immediately preceding the crisis did not hint of disruptive imbalances. These economies were registering average annual growth of roughly 7% to 8%.