I believe they are able, yes,
When it comes to anime, we're always seen Ash and his companions speaking with their own Pokémon and ones they encounter, as stated in previous post, and they seem to understand without much trouble at all; they respond immediately. In terms of games, they are able to understand, too; otherwise, they likely wouldn't have been able to listen to trainer commands.
In real life, animals (dogs and cats, for example) tend to listen to their human friends and reply accordingly (whether it be by making some movement of sorts, attempting an eye-contact, or barking or meowing), and same probably applies to Pokémon. It does make sense, if we think about it!