"Emerging East Asia could see a V-shaped recovery, with growth dipping sharply in 2009 before regaining last year's pace in 2010," ADB chief economist Jong-Wha Lee told a news conference in Bangkok.
"But it is only a small V shape," he said, adding that it was driven more by domestic stimuli than a rebound in external demand.
"As external demand will remain sluggish in the near future, emerging East Asia's recovery is expected to be gradual, with 2010 growth rising to about 6 percent," the statement said.
The ADB forecast a pick-up in demand from the second half of 2009 as policy measures gained traction and confidence improved.
"China alone cannot be the sole engine for the region's recovery as external demand is very weak; we need two engines," Lee said. He added that China's demand for imports from emerging East Asia depended on its ability to export.
With the expected recovery, the ADB said monetary policy in the region needed to remain expansionary until the recovery gained substantial traction or big inflationary pressures emerged.
"The authorities should plan rather than implement credible and coherent exit strategies to unwind the policy stimulus to prevent inflationary expectations from rising, which could later impede recovery and sustainable growth," the statement said.
As economies gradually pick up in 2010 -- though with growth remaining below potential, it said, inflation should stay under control, but further rapid increases in commodity prices may be inflationary and hurt the nascent recovery.
"For the moment, it would be good to retain the option for additional fiscal stimulus in 2010," the ADB said.
"To ensure the most direct impact on growth, fiscal stimulus should be focused on areas where it will be most effective and efficient -- 'shovel-ready' infrastructure, small and medium enterprises, rural economies, and social safety nets." (Editing by Chris Lewis)
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