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Asia-PacificJune 1 2012

Asia weighs euro impact as global economy rebalances

Delegates at the annual Asian Development Bank meeting in Manila had their attention firmly focused upon another continent – Europe – and what the economic problems in the region may pose for its trade and financial activity in Asia. 
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Asia weighs euro impact as global economy rebalances

The eurozone weighed on the minds of policy-makers at this year’s Asian Development Bank (ADB) annual meeting in Manila in May, as participants considered Asia’s role in the context of a changing global economy. While the shifting of economic gravity in Asia’s favour could be grounds for optimism, ADB delegates were instead focused on Europe’s impact on the region and debated whether Asia needs a new model for its long-term growth. Attendees were warned not to underestimate the potential for contagion from the eurozone crisis and the possibility that something worse than the ‘Lehman shock’ of 2008 and subsequent slump in output could be lurking around the corner. 

“There continues to be the risk that the financial crisis in Europe and slow growth in the high-income world will jeopardise Asia’s growth,” said Jeffrey Sachs, economics professor and director of Columbia University’s Earth Institute. 

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