MANILA, Philippines (AP) -- Asia is set for a mild economic recovery from the global financial crisis in 2010 after bottoming out this year, the Asian Development Bank's chief economist said Thursday.
"Clearly now we are in the transition from recession to recovery," Jong-Wha Lee said.
The crisis was "bottoming out in many Asian countries ... but 2010 will see mild recovery," he told reporters at the bank's headquarters in Manila.
However, sustained economic growth will take longer to achieve because Western industrialized countries, the main markets for Asian exports, will continue to struggle with "the worst recession since World War II," he said.
"We all understand (that) in 2009, these industrial countries will suffer from unprecedented recession synchronized across the three major regions -- the U.S., Japan and Europe."
Lee said the bank, founded in 1966 to fight poverty, is now forecasting a contraction in Europe this year of 4 to 5 percent compared with its March forecast of a 2.6 percent contraction. The U.S. economy was expected to contract by 3 percent.
The ADB forecasts 3.4 percent growth for developing Asia in 2009, down from 6.3 percent in 2008. "This is relatively better than other regions in the world," Lee said.
He said the Manila-based lender is advising Asian government to continue their economic stimulus packages while building social safety nets, developing the financial markets, supporting small and medium enterprises especially in the service sector and adapting flexible foreign exchange policies to help in the recovery.
"The most important thing is to revitalize the domestic industry serving the domestic market," he said. "How to strengthen the domestic and regional demand in Asia to provide another source of Asia's growth -- this will be the big challenge."
However, he said "Asia alone cannot be the engine of Asia's growth."
There was a need, Lee said, for Asia to work with industrialized countries to revive global demand for long-term growth.
