Davos - AFP
Bank of Japan Governor Haruhiko Kuroda on Saturday urged a Davos panel not to succumb to pessimism over the state of the world economy, as he welcomed the "big decision" by the ECB to embark on a huge bond-buying spree.
Kuroda was addressing the closing event at the World Economic Forum in Davos, the four-day gathering that brings together 2,500 of the world's most influential executives and leaders.
Insecurity and risk weighed on this year's meet after a year of unforeseen conflict in Ukraine and the out-of-the-blue rise of Islamic State extremists in Iraq and Syria.
"Some of the pessimism prevailing in Davos this year is a bit exaggerated," Kuroda said in a talk that also included his counterpart Mark Carney from the Bank of England and Benoit Coeure, executive board member of the European Central Bank.
The panel took place two days after the ECB announced a 1.14-trillion-euro ($1.27-trillion) bond-buying programme, or quantitative easing (QE), unleashed to avert deflation in a eurozone stuck at near zero-growth amid high unemployment.
Along with the diving price of oil, the ECB move could be "great for the world economy", Kuroda said.
"This QE is certainly quite significant with a somewhat open-ended nature. The eurozone is the biggest economic unit in the world," the central banker told his audience.
"By making this big decision, the eurozone could recover strongly and deflation pressure could be eradicated," Kuroda said.
Frenchman Coeure, fresh from ECB-headquarters in Frankfurt, said he had "certainly lived a momentous week."
The central bank had done what was necessary and it was now for the eurozone governments to do theirs, he added.
"Everyone has a job to do. We've done our part, others have to do their part," he said.
Coeure believed there was no time to waste, with nothing less than the future of the EU project at stake.
"In the case of Europe, being patient is just a risk that we don't want to take, we need sustainable growth in Europe," he said.
"With low growth, entrenched unemployment, people being dragged out of the labour market, we are seeing the whole political foundation of European project being weakened," Coeure warned.
A year before, no one had foreseen the fall in the oil price, which has dropped more than 50 percent and reached levels last seen during the financial crisis.
While producer countries in OPEC and beyond were suffering, much of the world could benefit and develop.
"The benefit of cheaper energy will make that transition easier for some of us. I think the fall in oil prices will be positive (globally)," said Joaquim Levy, Brazil's finance minister, also on the panel.
Levy is now looking to jump-start a Brazilis invan economy forecast to barely grow in 2015 while keeping a lid on inflation, which hit a government ceiling of 6.5 percent at the end of last year.
"We need confidence and less uncertainty" and focus on "transitioning growth" from consumption to investment, he said.