SINGAPORE (Dow Jones) –Economic growth in East Asia will slow next year with the removal of stimulus spending across the region and the impact of monetary tightening in China, the Asian Development Bank said.

The Manila-based lender remains upbeat about the region's prospects, however: The ADB upgraded its 2010 growth forecast for emerging East Asia to 8.1%, from 7.7% in an April report. That growth should moderate in 2011, but still come in at 7.2%, the bank said.

The ADB left its growth forecast for China at 9.6% this year and 9.1% in 2011, with Japan predicted to grow at 2.8% and 1.4%, respectively.

The bank's prediction of slower growth next year is the latest warning that the global economy is losing momentum after staging a strong recovery from the 2008 economic crisis, following similar remarks from the International Monetary Fund earlier this month.

Among key risks to its forecasts, the ADB cited the financial crisis in Europe and potential disruptions to the shaky economic recovery in advanced economies. It also noted the destabilizing effect of capital flows chasing high interest rates in Asia at a time of ultra-low rates in the US and Europe.

The report also warned against possible policy mistakes as Asian countries pare back fiscal stimulus spending and tighten monetary policy. That's already a matter of debate, especially in China, where a reduction of liquidity has led to a steep stock-market drop and fuelled concern over its effect on economic activity next year.

In a separate note Tuesday, the ADB upped its 2010 forecasts for a number of countries in the region. Singapore saw the largest upgrade, with 2010 growth now projected at 12.5%, up from a forecast of 6.3% in the bank's Asian Development Outlook in April.

However, the ADB predicts growth in Singapore will drop back to 5% in 2011, the largest slowdown anticipated in the region and a reflection of the island-state's high exposure to global trade.

Also upgraded were the Philippines, to 5.0% growth this year from 3.8%; Malaysia, to 6.8% from 5.3%; Thailand, to 5.5% from 4.0%; and Indonesia, to 6.0% from 5.5%.

Among key Asian economies, the ADB only expects Vietnam to post higher growth next year, when the economy is seen growing 6.8%, compared with this year's anticipated 6.5%.

In line with previous comments, the ADB said Asian countries, many of which intervene heavily in forex markets to weaken their currencies and protect export competitiveness, may need to allow for stronger currencies to help rebalance their economies away from developed-world demand and toward domestic consumption.