We too were affected by the crisis. Output growth which averaged 9.5 per cent per annum during the three year period 2005/08 dropped to 6.8 per cent in the crisis year of 2008/09. Exports which grew at 25 per cent during 2005/08 decelerated to 12.2 per cent in the crisis year (2008/09) and declined by 2.2 per cent in 2009/10.
This trend has four elements: very low inflation and very low interest rates in major economies as well as abundant liquidity and low volatility in many financial markets. Together, these four ingredients make up a cocktail that may well result in a bad headache the morning after. One potential problem is the search for yield.