Susceptible Infected by Virus Asia Crisis U.S. and Europe

Singapore - Asia, including China and India, will be vulnerable if the United States and Europe slipped into another recession. Concerns were conveyed by the Prime Minister of Singapore Lee Hsien Loong.

In his annual policy speech, Lee warned, the world may be sinking into recession because the debt crisis in Europe and the U.S. economic woes resulting downgrade by Standard & Poor's.

"Europe is in trouble, America is in trouble," said PM Lee in his speech as quoted by AFP on Monday (8/15/2011). He said the issue has fueled market volatility.

Lee added that market volatility is "just a reflection of the real issues" that reduce investor confidence in U.S. and European governments whether they can "make the hard decisions and to solve the problem of deep and very serious."

The U.S. government judged Lee spent too much and the fiscal deficit "unsustainable". He added that the deep divisions between Republicans and Democrats have made the country more difficult to solve the problem.

Over the issue, Lee assessing China, India and other developing countries to do "good enough" for now.

"But if America and Europe will go into another recession, then I think China, India and other developing countries will also be affected, will also be vulnerable," said Lee warned.

"And so Singapore must be vigilant. We do not need to press the panic button, but we must be vigilant because there is quite likely that the world will go into another recession," he added.

"That will affect us could easily happen," he added.

Singapore economic growth contracted 6.5% in the second quarter as demand for global electronics slump, according to official data. Singapore's export-dependent Asian economies is the first negative growth during the last global crisis in 2008 but also led the recovery with the development of a strong rebound in 2010.

Markets worldwide have been roiled amid fears that the U.S. debt crisis and the euro zone could trigger a new recession. The crisis began in Greece and is now driven by fears that the Spanish or Italian may default their debt.


source: http://finance.detik.com