Forecasts for Asian growth raised

Government stimulus packages have helped to boost domestic demand

The economies of China and India are set to grow by more than previously thought in 2009, the Asian Development Bank (ADB) has said.

Government spending in developing Asian economies had enhanced the region's growth prospects, it said.

It now expects China to grow by 8.2% in 2009, up from an earlier forecast of 7%. India's forecast has been raised to 6% from 5%.

But it also warned governments not to withdraw stimulus policies too soon.

"Expansionary fiscal and monetary policies have softened the blow of the global slump on the economy," the ADB said in its updated annual outlook.

"A surge in bank lending and vigorous fixed-asset investment has maintained growth at a higher pace than was expected in March."

But it added: "This is not the time for an exit from expansionary policies - the recovery remains fragile and subject to serious downside risks."

The ADB raised its growth forecasts for the region to 3.9% in 2009, from its previous forecast of 3.4%. It also raised its 2010 forecasts to 6.4% from its previous estimate of 6%.