By Karen Johnson
MONTREAL--Asian nations must prepare for the prospect of another
worldwide recession, with the force of Europe's sovereign-debt crisis
imperiling the prospects for global growth, said Haruhiko Kuroda,
president of the Asian Development Bank.
The Asian region must rebalance economies more toward domestic and
regional sources of growth, Mr. Kuroda said, speaking at the
International Economic Forum of the Americas in Montreal. That
process, he said, has already begun.
"I share serious concerns about Europe," Mr. Kuroda said. "Further
deterioration in Europe could drive the world economy back into
recession."
He said European leaders should act urgently and decisively "before it
is too late."
He called Spain's decision to request aid over the weekend to help
recapitalize its troubled banks "a significant step forward," one that
could pave the way toward a banking union or even a fiscal union, both
of which would be absolutely necessary for making the common currency
sustainable.
"There is no way to predict the full impact of a major euro crisis, if
it arises, on developed nations, but what is clear is that Asia cannot
be immune to the crisis and must be prepared," he said.
The Asian region's growth prospects this year are expected to moderate
to 6.9%, he said, from 7.2% in 2011. Forecasts are currently for 7.3%
growth in 2013.
The forecasts were based on assumptions that restructuring in Greece
would lessen the risk of a global liquidity crunch. "Unfortunately, we
see the situation becoming increasingly serious," Mr. Kuroda said.
In Asia, financial safety nets have been strengthened, Mr. Kuroda said.
Write to Karen Johnson at karen.johnson@dowjones.com
(END) Dow Jones Newswires
June 11, 2012 11:09 ET (15:09 GMT)
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