India becoming one of world's fastest growing economies: IMF

India's growth rate is expected to rise to 7.5 percent this year and next, making it one of the fastest growing economies in the world, according to the IMF's latest economic health check.

The other Asian giant China's economy is slowing to a more sustainable pace - 6.8 percent GDP growth in 2015, and 6.3 percent in 2016, according to the International Monetary Fund's Regional Economic Outlook for Asia and the Pacific.

Growth in Asia and the Pacific will continue to outperform the rest of the world, and is expected to remain steady at 5.6 percent in 2015, easing slightly to 5.5 percent in 2016, said the report released Thursday. Growth will be driven by domestic demand, underpinned by healthy labour markets, low interest rates, and the recent fall in oil prices.

The global recovery, while moderate and uneven, will continue to support Asia's exports, says the report.

The IMF's Regional Economic Outlook calls for a strong push for structural reforms across most, if not all, economies in the region.

The report notes that in addition to boosting productive capacity, structural reforms can help rebalance growth toward consumption, which remains a priority for some major Asian economies.

Major reform areas include measures to address supply-bottlenecks in India, state-owned enterprises, and financial liberalisation in China, and initiatives to raise services productivity, and labour force participation in Japan.

Maintaining flexible fiscal and monetary policies to effectively manage aggregate demand will remain important in the future, say the report's authors.

The report noted that lower oil prices have provided an opportunity to undertake further fiscal reforms aimed at lowering energy subsidies, and measures have been taken in a number of countries, including India, Malaysia, and Indonesia.

Financial and macro-prudential policies should continue to address financial sector risks.

This will be particularly important to increase resilience to shocks, and to contain the buildup of systemic risk associated with shifting financial conditions, and volatile capital flows, the report said.

Asia, which accounts for nearly 40 percent of global output, but contributes nearly two-thirds of global growth, will remain the global growth leader, even though potential growth-the economy's speed limit-is likely to slow, it said.

But the outlook could be vulnerable to adverse events, says the report.

Most Asian policymakers have in place broadly appropriate interest rate and fiscal policy settings, although the risk of renewed financial volatility may warrant a somewhat tighter monetary policy stance in some countries, it said.