The Asian Development Bank raised its growth forecast Tuesday for Asia's developing economies because global trade and conditions in the world's biggest economies are improving more than expected.
The Manila, Philippines-based lender said it now predicts the region's economy will expand 5.9 percent this year and 5.8 percent in 2018.
That's up from the ADB's earlier forecast of 5.7 percent growth for each of those two years.
The ADB said trade is rebounding after exports fell for two years, helping to boost the growth outlook for the 45 countries covered in the report. The region's exports and imports expanded by double-digit rates in dollar terms for the first five months of the year, it said.
The bank also upgraded its 2017 growth forecast for China to 6.7 percent from 6.5 percent previously. For next year, it raised the forecast by 0.2 percentage points to 6.4 percent. It said Beijing's fiscal stimulus measures and rising foreign demand are helping to give Asia's biggest economy strong momentum.
Robust expansion in the U.S., Japan and the eurozone, which are big sources of demand for developing Asia's manufactured exports, is also lifting regional growth, the report said.
The bank said risks to its forecast were more balanced now than in its initial report in April, when it cited the evolving policies of the President Donald Trump's administration as an uncertainty that could undermine growth.
Now, factors such as the Federal Reserve's plan to raise U.S. interest rates remain a risk by drawing money out of the region and putting pressure on banks and companies in Asia with high debt levels. But the ADB said that the Fed's "clear and transparent communication" about its plans to bring rates back to normal levels gives markets time to prepare.