The Asian Development Bank (ADB) is set to raise the growth forecast for developing East Asia when the bank refines its annual flagship publication this September, economists said, as the region rebounded faster from the global economic downturn.

The Asian Development Outlook originally forecasted the Gross Domestic Product (GDP) of the bulk of developing East Asia to grow only 3 percent year-on in 2009. However, stronger-than-expected performance of the Chinese economy in particular has lifted the region's recovery perspective.

Leilei Song, an economist with ADB's Office of Regional Economic Integration, told Xinhua that the bank is now more optimistic than in March when the Outlook was published.

"Economic performance in the region has improved since the second quarter," he said. "Emerging East Asia has entered the transition to recovery."

Song said even Japan is benefiting from the quicker recovery of its developing Asian neighbors and is expected to perform better than the eurozone and the US economies.

The Asian Economic Monitor (AEM), published by the Philippines-headquartered ADB in late July, hinted that growth forecasts for China, Indonesia, and possibly South Korea are more likely to be scaled up when the ADB publishes the refined Outlook on September 22.

While the Outlook is seen to downgrade growth forecasts for the rest of developing East Asian economies including Singapore, China's Taiwan and Hong Kong, Malaysia, the Philippines, Song said it is because the damage caused by the global crisis was more severe than the ADB expected in March.

Second-quarter growth figures released by the region's economies, however, have shown signs of stronger recovery, he said. In particular, China, which accounts for more than half of the region's GDP, beat most estimates by growing 7.9 percent year-on, nearing the 8 percent whole-year growth target set by the government.

Meanwhile, newly industrialized economies like Singapore, China's Hong Kong and Taiwan all saw their Supply Management's manufacturing index rising over 50 in recent months, indicating the region's crisis-battered manufacturing sector has regained growth.

But ADB Chief Economist Jong-Wha Lee warned that Asia can not expect to return to the average 8 percent trend growth too soon because the external demand remains weak.

"Economic growth in the US, Japan and Europe influences East Asia's regional output at least as much as China's does," he said in an opinion piece recently published by the South China Morning Post. "Clearly, China or Asia alone cannot be the region's sole engine of growth."

The AEM expects the US economy to contract 3 percent this year, the eurozone 4.3 percent and Japan a whopping 5.8 percent before the world's three largest industrialized economies start to gain strength and grow in 2010.

Lee urged export-dependent Asian economies to continue restructuring for a balanced growth and to foster Asia's own domestic and regional demand.

"A return to sustained and rapid long-term growth will require a rebalancing of the sources of growth and the safeguarding of financial market stability," he said.

(Xinhua News Agency September 2, 2009)