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US, Europe Downturn Remains Risk for 2023, ADB’s Asakawa Says

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Masatsugu Asakawa on Feb. 2.
Masatsugu Asakawa on Feb. 2.Source: The Asian Development Bank

Elevated interest rates may still cause a recession in the US and Europe and that’s a risk scenario for Asia this year, according to Asian Development Bank President Masatsugu Asakawa, who some economists see as a contender for Bank of Japan governor.

Unlike in Japan, labor markets in the US and Europe could keep tightening to fuel strong wage pressure that would limit central banks’ scope for cutting rates, resulting in a recession, Asakawa said in an interview Thursday.