The municipal bond market grew in the first quarter at a slower pace than in pre-crisis years as the industry coped with a severe recession and life without bond insurance.

The amount of municipal debt outstanding at the end of the first quarter grew 1.3% from the end of the year, to $2.716 trillion, according to Federal Reserve data released Thursday.That represented a 2.7% annual growth rate from the end of the first quarter last year. A 2.7% annual growth rate is a decided slowdown compared with the past decade. The amount of municipal debt outstanding grew at a 7% compound annual rate between 1999 and 2007. In 2008, the growth rate slowed to 2.4%.

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