The 1997 Asia Financial Crisis
The 1997 Asia Financial Crisis caused the most countries of East Asia to suffer a negative economic growth in the year of 1998-1999. Countries that suffered include Laos, Malaysia, Philippines and Hong Kong S.A.R., while the countries that were hit hardest were Thailand, Indonesia and South Korea.
Prior to the crisis, East Asian countries enjoyed high growth rates of GDP from 8-12%. Many economists theorize that the crisis was caused by large quantities of credit accumulated by the various Asian countries in that time of high economic growth.
Stock market prices collapsed in Hong Kong and its GDP contracted 5.5% in 1998. In the next six consecutive years, the region suffered deflation only to overtake its pre-crisis level in 2005. During this period of time, the standard of living in Hong Kong decreased. Materially, as evidenced by national income decreased, and non-materially, as the high levels of debt induced high levels of stress on the people.