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OAKLAND — The most recent economic forecast for the Bay Area from the Association of Bay Area Governments suggests reasons for the region to be somewhat optimistic about an economic recovery. 

Presenting the short-term outlook to governmental budget directors and to members of the business community in Oakland today, ABAG research director and economist Paul Fassinger said the Bay Area is expected to recover from the recession by the third quarter of 2002. The recovery will be accompanied by a slight growth in jobs and household income by the end of the year, he said. 

However, Fassinger noted that the recovery will not bring the Bay Area back to the fast growth that was experienced from 1997 to 2000, the heyday of the dot-coms. Instead, the growth rates will be slower, and similar to the pace experienced before the accelerated growth of the last few years.  

ABAG figures show that in the Bay Area last year, household income dropped by 2.5 percent from the previous year. This year, a growth of 0.2 percent is predicted, while in 2003, household income is expected to go up by 1.7 percent. 

Inflation, which was 5.4 percent in 2001, is expected to reach 2 percent this year and 2.5 percent in 2003. 

In 2001, there were 53,800 jobs created, while the number is expected to grow by 10,100 in 2002 and 40,000 in 2003. 

In its report, which covers the years 2002 to 2003, ABAG predicts that the Bay Area will recover at the same time as the rest of the country, a prediction not shared by analysts who say that the region's large number of high-technology industry businesses will lead to a slower bounce back. 

Fassinger notes that the high-tech sector is too diverse for anyone to lump all the businesses it encompasses together and take the data as an economic indicator. 

Fassinger also pointed out that not all of the Bay Area's downturn can be attributed to high technology. The downturn can also be attributed to drops in tourism and finance, and those businesses are expected to recover, he said.