ADB’s chief economist Lee Jong-Wha said the outlook for East Asia this year remained "pessimistic" but foresaw a V-shaped recovery led by China if countries continue to focus on stimulating domestic demand.

Talking with the press in Bangkok ahead of the release of ADB’s biannual Asia Economic Monitor report, Lee said “the big question is whether it will be sustainable growth.” He added that it will be very difficult for Asia to return to pre-crisis growth rates.

According to him, despite an increasing proportion of export demand coming from within Asia, the region overall continues to rely on markets in the US, the EU and Japan for 60 percent of exports. And those markets are less likely to recover from the global financial crisis so quickly, he said.

The ADB official recommended a continued focus on loose monetary and fiscal policies to stimulate domestic demand, with support for small enterprises and the swift, efficient use of stimulus packages.

He said that the pace of capital outflows from Asia had slowed in the first quarter of 2009 and urged large Asian investors to focus more on their capital spending within the region.

He said, while China's recovery has "gained traction" and the smaller, more closed, economies such as Indonesia are on course toward stronger growth, concern remained for smaller, more export-dependent regional economies such as Hong Kong, Singapore, Malaysia and Thailand.

ADB predicted earlier this year that developing countries in Asia would see their economic growth rate fall to 3.4 percent this year from 6.3 percent in 2008.