The International Monetary Fund (IMF) projected on Thursday that China will grow by 8.5% this year and 9.0% in 2010.  This compares with the projection of 7.5% for 2009 and 8.5% for 2010 made in July.

Recent indicators point to a strengthening recovery in Asia "led by a rapid rebound in China, where growth accelerated to an annual rate of 7.1 percent in the first half of the year," IMF said in its World Economic Outlook (WEO) issued on October 1.

Asia's growth momentum will build during the second half of 2009, forming the basis for a generally moderate recovery in 2010, said the report. Due to China's stimulus policy, the "emerging" Asia will grow by 5.0 percent this year and 6.8 percent in 2010.  For the overall emerging economies, "real GDP growth is forecast to reach almost 5 percent in 2010, up from 1¾ percent in 2009. The rebound is driven by China, India, and a number of other emerging Asian economies. Other emerging economies are staging modest recoveries, supported by policy stimulus and improving global trade and financial conditions."

While the manufacturing-oriented economies such as South Korea and Singapore slumped and had recorded peak declines in industrial production of about 25 percent by the end of 2008, only China, Indonesia and India escaped a severe recession, said the report.

The intensifying rebound in Asia can be linked to three factors, said the report, namely expansionary fiscal and monetary policy, a rebound in financial markets and capital inflows and the growth impulse for industry following large inventory adjustments.

IMF on Thursday raised its 2010 growth forecast for the world economy to 3.1 percent from 2.5 percent, saying the global recession "is ending."  "The global economy is expanding again, and financial conditions have improved markedly. It will still take some time, however, until the outlook for employment improves significantly."