MANILA East Asia's outlook is looking brighter despite storm clouds over the United States economy, the Asian Development Bank (ADB) said Tuesday.

The Manila-based bank slightly raised its growth forecast for the region this year to 5.8 percent.

"Data released in recent months show that growth has picked up across East Asia. Growth is also becoming more balanced with a turnaround in exports being complemented by strengthening domestic demand," it said in a quarterly report, *****Asian Economic Monitor (AEM)******.

There is now consensus that the region's average gross domestic product growth would reach 5.8 percent in 2002, or "0.6 percentage point higher than the forecast in the April ***AEM****," it added.

The report also noted that the "recent slide in the U.S. stock market, the may decline in retail sales, and the softening of consumer sentiment in June, risks to the U.S. recovery may have increased. "Yet, so far, these risks appear to be manageable and are unlikely to derail the moderate recovery in the U.S. forecast in the April *****AEM*****. The external environment facing East Asia, therefore, continues to be favorable."

ADB had forecast in April that East Asia would make a faster than expected, but moderate, rebound from the economic slowdown in 2001 that was induced to a large part by recession in the United States and Japan and the terrorist attacks in New York and the Pentagon, AFP reported.

"With the maintenance of political stability and improvements in prudential indicators in most countries of the region, domestic risks to East Asia's current economic rebound appear to be receding somewhat," the bank said. "The single most important risk to the current forecast of a moderate rebound in East Asia may arise from any continuation of the recent deterioration in the U.S. financial markets during the balance of this year.