Although global economy will continue to strengthen through 2010, effects of the deep recession are likely to linger, an economic expert said on Thursday.

Shahid Yusuf, Economic Adviser for the Development Economics Research Group, The World Bank, made the remarks at Malaysia's National Economic Advisory Council Talk.

Shahid said that governments from many countries had pumped in a great amount of money into their economies, resulting in huge liquidity in the markets.

The huge liquidity and expansion of credit as well as the extremely low interest rates would in turn cause risks of echo bubbles, added Shahid.

On investment, Shahid noted that the growth rates could be lower than before, resulting in slower economic growth.

This was similar to the case after the Asian Financial Crisis in 1997/ 1998, added Shahid.

He said that other possible effects included lower research and development spending, fewer jobs in manufacturing sectors in recovering countries as well as dampened demand in the United States.

To export itself out of the crisis, Shahid said the U.S. economy would need to adjust and narrow its current account gap by depreciating the U.S. dollar and increasing U.S. saving.

A transfer of 2-3 percent of its gross domestic product from non-tradable to tradable sector would also help, added Shahid.

The talk, titled "Industrialization in the 21st Century: Preconditions, Drivers and Policies", drew some 60 participants from various ministries and agencies of the Malaysian government.