The World Bank has raised its forecast for global growth this year to 2.7 per cent but warns that the recovery may lose momentum in the second half.

It believes that China will lead the Asian growth story as investors shift their focus away from the developed consumer economies of the West.

The global economic recovery is under way but the World Bank has confirmed a growing view that Asia is among the leading players.

China is seen to be the growth story for Asia with the latest GDP numbers bearing this out.

The Chinese economy grew 8.7 per cent in 2009 and 10.1 per cent in the fourth quarter alone.

The World Bank said it is China's capacity for growth and its ability to continue investing in the rest of the world that will have the biggest impact, not consumption.

But it said in a video conference that once government stimulus measures run out, the private sector will have to play a bigger role in sustaining economic growth.

Hans Timmer, director, Development Prospects Group, The World Bank, said: "When you have growth coming out of the private sector, that creates additional income which will be spent to create additional demand. At the same time it creates the capacity to produce the products to meet that demand. So your are increasing at the same time, both supply and demand, and that is the only way that you can have sustainable growth."

The bank expects developing East Asia, which excludes Japan, Hong Kong, Taiwan, South Korea and Singapore, to expand 8.1 per cent this year, faster than its November estimate of 7.8 per cent.

However, it also warns of the higher risk of asset bubbles and overheating in Asian economies.

Economies like South Korea and Hong Kong are facing rising asset prices, spurred by record-low interest rates and government stimulus.

While the World Bank expects global GDP to grow by 2.7 perc ent this year, and 3.2 per cent in 2011, the World Bank said that to be achieved, banks must be more aggressive and be willing to support corporates as they become the engines for growth.