NEW DELHI, May 6 (Bernama) -- A key United Nations (UN) regional agency Thursday forecast that Asia and Pacific economies would rebound sharply in 2010, but cautioned of pitfalls that could stifle future growth.

The Economic and Social Commission for Asia and the Pacific (ESCAP) in its recent survey said, Asia-Pacific developing economies are expected to grow by seven per cent, compared to the four per cent during the financial crisis-hit 2009.

"But the road ahead has a number of potential pitfalls," said ESCAP's report released in Delhi.

"One concern is protectionism. Many developed countries, facing anaemic growth coupled with high unemployment, may restrict trade," it said.

"This has led to prominent trade disputes that pit developed countries against the large exporters in this region," added the report.

According to ESCAP, the self-sustaining motors of China and India growing at 9.5 per ent and 8.3 per cent respectively, would propel the region's growth story in 2010 while smaller regional economies would also be on a positive growth trajectory.

ESCAP, the regional development arm of the United Nations, urged governments to formulate a regional financial architecture to counter future economic woes.

It noted that the economic crisis had revealed the lack of regional responses, leaving national governments to take responsibility.

"So far, the cooperation has been largely limited to the Chiang Mai Initiative that has now been multilateralised with a reserve pool of US$120 billion (RM420 billion), for meeting the temporary liquidity needs of the Asean + 3 countries (China, Japan and South Korea).

"The region now needs to further develop its financial architecture, which would include systems of intermediation between its large savings and unmet investment needs," stated the report.

-- BERNAMA