By JOY FANG

SUSTAINABLE economic recovery will come about only with a recovery in the financial markets as well as that of the real economy, said World Bank chief economist Justin Lin Yifu yesterday.

He said: "If we have a trend in the financial side and a trend in the real side, both moving in the same positive direction, then I think we can count it as a sustainable recovery."

The World Bank warned on Monday that prospects for the global economy remained "unusually uncertain", despite recent signs of improvement in parts of the world.

The agency cut its forecast for the world economy this year, predicting a 2.9 per cent contraction, from a projection of a 1.7 per cent decline set in March.

Yesterday, Professor Lin declined to make a prediction as to when recovery will happen, but said he hopes it will come as soon as possible.

"Certainly it depends on many factors, including whether governments can take effective stimulus (measures) globally," he added.

The 57-year-old was speaking to reporters ahead of the Eminent Speakers Series yesterday, where he was the distinguished speaker. The event, a collaboration between Chinese-language daily Lianhe Zaobao and networking group Business China, was held at the Singapore Conference Hall. It was supported by the SPH Foundation.

Prof Lin also praised Singapore for its "remarkable" economy and the way it tackles the global financial crisis, saying that the Government has adopted fiscal stimulus in a very timely manner.

"The macro fundamentals are sound, the Government is effective and business communities are very agile and respond very quickly...(they) make some adaptations to cope with the challenges," he said.

And the country's recovery, he added, depends on the international economic situation. "In such a global environment, no individual country can fully offset the adverse impact from global shocks," he said.

Based in Washington, the Taiwan-born Prof Lin is the World Bank's first chief economist from a developing country.

joyfang@ sph.com.sg

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