A period of severe economic instability in the economies of South East Asia that began in the summer of 1997 and caused economic growth to cease in several countries. The crisis originated in the financial markets of Thailand and Korea due to speculation causing funds to be withdrawn from their currencies and stock markets. The crisis led to a slowdown in the world economy in 1998.

The origins of the crisis have been attributed to the fact that several South East Asian countries unofficially fixed their exchange rates against the US dollar. The appreciation of the US dollar from 1995 onward caused an appreciation of these currencies and a consequent loss of competitiveness in export markets. This led to several countries facing difficulties in financing current account deficits. The Thai baht was devalued in July 1997 after suffering from speculation on foreign exchange markets. Further speculative attacks followed, and Malaysia, Korea, the Philippines, Indonesia, Taiwan, and Singapore also had to devalue. The effect of the financial crisis on public finances required the IMF to provide a rescue package totalling $112 billion for Thailand, Korea, and Indonesia. Even so, interest rates increased and caused corporate insolvencies and a collapse in the level of economic activity. The crisis resurfaced in mid-1998 and, beginning with Japan, spread to a wider range of countries.

The Asian crisis had significant repercussions throughout the world with a slowdown in trade and foreign direct investment. The crisis has raised questions about the structure of the international financial system and the extent of systemic risk. Policy proposals to avoid a similar crisis in the future included setting global standards for banking regulation, raising the quality of economic statistics, and improving access to information for investors in emerging markets.