The Asian Development Bank upgraded Tuesday growth forecast for developing Asian region to 4.5 percent as monetary and fiscal policies helped the region recover from the worst global meltdown since the second World War.

Jong-Wha Lee, Chief Economist of Asian Development Bank (ADB), speaks at a press conference in Manila, capital of the Philippines, December 15, 2009. The ADB said that the 14 economies of emerging East Asian region will collectively grow by 4.2 percent this year and by 6.8 percent in 2010. That is higher than the September forecast of 3.6 percent and 6.5 percent, respectively. [Xinhua]

In its special assessment of the region released Tuesday, the ADB also upgraded its GDP forecast for 2010 to 6.6 percent. This marks an increase from the 3.9 percent and 6.4 percent, for 2009 and 2010 respectively, it predicted in its Asian Development Outlook published in September.

"The global economic situation is changing rapidly, necessitating frequent reassessments. The prospects for much of the region look rosier than they did in September when we last did a full study of the region. Fiscal and monetary stimulus policies and a moderate improvement in the G3 economies of Europe, Japan and the US helped East Asia and Southeast Asia in particular," ADB Chief Economist Jong-Wha Lee said.

Monetary easing policies and fiscal stimulus packages implemented by most Asian governments supported domestic consumption, partially offsetting the sharp fall in exports. The export sector powered most Asian economies and the global recession has waned demand in the US and Europe the main export markets for Asia.

China and India the world's fastest growing economies will lead the region's recovery. The ADB noted the resilience of the giant Asian economies, growing at a rate which surpassed expectations.

China's GDP grew 7.7 percent on year in the first nine months of 2009. The ADB noted that China's growth remained "robust" amid the global meltdown thanks to huge fiscal stimulus package and monetary easing policies. The ADB forecast China grow 8.2 percent for the whole year of 2009 and 8.9 percent in 2010.

"We expect the China's economic growth to accelerate next year, but the speed of that upturn will depend on the performance of the global economy. The recovery in the G3 is still soft and there area number of downside risks," Lee said.

Lee said in press briefing that China can maintain a "strong growth momentum." But he suggested that policy makers should continue structural reform to shift the focus on export to domestic consumption. This structural reform will take a long time, but Lee believes it is in the interests of Chinese people and the world to implement these reforms.

India's GDP expanded 7.9 percent in the third quarter, led by rapid manufacturing sector growth. Managing the rise in inflation is a challenge, Lee said. He noted that the government and central bank will have to consider carefully as they assess policy. Still, the ADB expects India to grow 7 percent in 2009, a full percentage point higher than projected in September.