Boom conditions of several years ago were an aberration and will not be repeated, a Standard and Poor's economist says, and expectations of economic growth need to be scaled back.
The credit rating agency's chief Asia-Pacific economist, Subir Gokarn, says a recovery is underway, thanks to central banks slashing interest rates and pumping money into economies, a burst of government spending and the re-emergence of China as an engine of growth for the region.
But he says it will be a slow, cautious and tentative recovery as Western consumers rein in their debt-fueled spending and Asian nations spend more.
That means the economic and credit boom between 2004 and 2007 was an aberration that won't be repeated, he says, and a recovery will not take the world back to those conditions.
A structural change is taking place, and expectations of the pace of growth must be scaled back. Asian economies which had been driven by export surpluses are gradually changing to becoming more dependent on domestic demand.
Mr Gokarn says there are risks to the recovery from rising commodity prices and from higher long term interest rates due to increased Government borrowing, which may choke off demand from consumers and firms.
