Europe poses risk to Asian growth

Australia's central bank warned that renewed financial turmoil in Europe could pose a risk to Asian growth.

Assistant governor of the Reserve Bank of Australia Phillip Lowe said that concerns about public finances internationally could rebuild. Lowe said the RBA would be watching carefully over the weeks and months ahead to assess how the balance of these risks evolves.

He was confident that Australia has the policy flexibility to respond to any change in the global economic environment. Lowe added that Australia was benefiting from Asia's strong recovery from the global financial crisis led by China.