The abrupt deceleration in growth in Asia has been more rapid than in other regions, and in key countries even sharper than at the epicenter of the global crisis. In the fourth quarter of 2008, GDP in Asia, excluding China and India, plummeted by close to 15 percent on a seasonally-adjusted annualized basis. Much of Asia relies for its growth engine on advanced manufacturing exports. Those countries with a larger share of advanced manufacturing in GDP have been experiencing sharper output declines. The underlying reason is that advanced manufacturing is more cyclically sensitive than other items. Growth in Asian economies with a lower share of manufacturing, such as the commodity exporters, had initially held up better, although now the collapse in commodity prices were hitting hard. Even service-oriented economies which provide logistical and financial support have been hard hit as demand for their services has dropped. Private investment in most countries has slowed significantly. And although private consumption so far has shown relative resilience, falling incomes and tighter financial conditions foreshadow a slowdown ahead. On the whole, recession promises to be deeper and more prolonged compared to previous cycles. On the whole, the sudden stop in access to financing has been more acute for the private sector, a few countries in the region have successfully issued sovereign bonds recently, but on quite expensive terms. When the demand shock hit, corporate faced little immediate pressure to scale back their activities or cut costs. However, liquidity positions have since dwindled. A credit crunch combined with a sharp fall in demand can quickly put a healthy corporate sector into trouble, and profits can quickly evaporate. The rate cuts have been largely offset by declining inflation expectations. The real interest rates have remained relatively constant in a number of countries. Moreover, greater caution by banks and rising risk premium have weakened the traditional monetary transmission mechanism.