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Asian, European ministers say price rises threaten stable growth

JEJU ISLAND,South Korea - Asian and European finance ministers warned on Monday that surging prices for oil, food and other commodities threaten stable world economic growth.

Wrapping up a two-day meeting dominated by the issue, they said in a statement the increases "pose a serious challenge to stable economic growth worldwide and have serious implications for the most vulnerable."

The ministers or their deputies from 27 EU countries and 16 Asian nations called for coordinated policy responses to cushion the impact, including greater investment in agriculture and energy and the maintenance of open markets.

"Ministers highlighted the need for further analysis on the real and financial factors behind the recent surge in commodity prices, their volatility and the effects on the global economy," the statement said.

Delegates to the Asia-Europe Meeting (ASEM) of finance ministers, on the South Korean resort island of Jeju, said they remain positive about the long-term global economic outlook but short-term prospects had weakened.

Downside risks included the US slowdown, tightened credit in world financial markets and "mounting inflationary pressures mainly driven by high energy and food prices."

The ministers, whose countries represent 60 percent of the world's population and about half its output, stressed that both Asia and Europe are "significantly more resilient" to external shocks than a decade ago.

But they cannot be fully immune to global economic risks, they said.

The meeting has been marked by warnings of the potential dangers posed by rapidly rising commodity prices.

South Korean President Lee Myung-Bak said the world faces its most serious economic crisis since the 1970s.

"Instability in the global financial market has spread to the real economy, thus putting a damper on world economic growth," Lee said in a speech.

"Coupled with a steep hike in the price of oil, food and raw materials, it is now no exaggeration to say that the global economy is faced with the most serious crisis since the oil shocks of the 1970s."