Source: China Daily (China)
Source type: Newspaper
Published on: 17 Jun 2008

Asia and Europe are better placed than others to cope with the global economic slowdown, according to officials attending a meeting of finance ministers from the two regions in Jeju, South Korea.

The two areas "have good fundamentals" to weather in better condition than others facing these difficulties, European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said yesterday. French Finance Minister Christine Lagarde said the regions "were far more resilient than expected in the light of the international economic crisis".

Asian countries are turning to each other and oil-rich nations to make up for waning sales in the United States in the wake of the housing recession and subprime-mortgage crisis.

In Europe, the euro's strength is damping the increase in the price of oil, and demand from the continent's emerging eastern half is keeping order books full in countries such as Germany.

The Organization for Economic Cooperation and Development predicts economic growth in Japan and the euro region will outpace the expansion in the US both this year and next.

Growing intra-Asian trade has been compensating for slowing exchange between the US and Asia, Supachai Panitchpakdi, secretary-general of the United Nations Conference on Trade and Development, said in Jeju.

'Not devastating'

"I think there might be some slowdown but not really one that's devastating," Panitchpakdi said with regard to trade. "Looking at the Asian economic growth on a general basis, at the moment I don't see much of a real impact" from the US slowdown.

German Deputy Finance Minister Thomas Mirow said ministers "see with a certain relief that Asia not only isn't the source of the crisis, but so far has even held up fairly well", alluding to the 1997 market turmoil that gripped parts of Asia.

Still, Almunia said Asia and Europe face "difficulties from an inflation point of view, because of oil prices, because of food prices". Financial-market turmoil is "having some consequences in our real economies and growth forecasts have been reduced a little bit".

Spanish Finance Minister Pedro Solbes said inflation over the medium to long term is "the biggest danger" for economic growth in Europe. At the same time, he added, governments must foster productivity growth and increase competitiveness.