The International Monetary Fund allayed markets concerns about immediate risks to China's growth as Beijing moved to tighten liquidity amid soaring inflation and record high bank lending.

In its World Economic Outlook update released Tuesday, the Washington-based fund said Asian developing economies were set to grow at an average 8.4 percent this year as well as in 2011, compared with 6.5 percent in 2009.

China, the traditional global growth driver, was likely to post 10 percent growth this year, the IMF said, raising by one percentage point its 9.0 percent forecast made in October.

But the fund said growth in the world's most populous nation could slow to 9.7 percent next year. China's economy expanded 8.7 percent in 2009.

Chinese gross domestic product, a broad measure of a nation's goods and services output, returned to double-digit growth in the fourth quarter of 2009 at 10.7 percent, Chinese authorities said last week.

That pace surpassed the government's target of eight percent, a level that is seen as crucial to foster job creation and stave off social unrest in China's urbanizing population of 1.3 billion people.

But rising inflation, along with a government clampdown on bank lending and hike in borrowing costs, has kept markets on edge in recent weeks amid fears that a Chinese economic slowdown could dampen global recovery.

Jorg Decressin, head of the IMF's world economic studies division, ruled out immediate risks in China, in a media briefing after the report's release.

"There is no serious market-bubble risk," he said.

The fund said "key emerging economies in Asia are leading the global recovery" as the region became the first to rebound from a global downturn stemming from the worst financial crisis in decades.

India is expected to join China in providing impetus to growth in Asia this year and in 2011, the IMF said.

India should post 7.7 percent growth in 2010, it said, revising upward by 1.3 percentage points its earlier forecast.

In December, Indian Finance Minister Pranab Mukherjee gave his most bullish outlook yet for the Indian economy, saying growth would be nearly 8.0 percent in the fiscal year to March 31.

The world's second most-populous nation is also expected to grow 7.8 percent next year after managing 5.6 percent last year, according to IMF projections.

Japan is poised to emerge with a growth of 1.7 percent in 2010 -- unchanged from the last forecast -- after a sharp 5.3 percent contraction last year, the IMF said, adding that Asia's richest economy could accelerate to 2.2 percent next year.

The fund also said that the Southeast Asian economies of Indonesia, Malaysia, the Philippines, Singapore and Thailand were forecast to grow at a slightly better average of 4.7 percent in 2010 from 1.3 percent last year.

Asia's growth forecast is above that for the world's emerging and developing economies of about six percent in 2010 following a modest two percent last year.

The IMF sees more rapid output in 2010 for the world's developing economies.

"Stronger economic frameworks and swift policy responses have helped many emerging economies to cushion the impact of the unprecedented external shock and quickly re-attract capital flow," it said.

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