UPDATE 1-Goldman Sachs raises Asia, China GDP forecasts

(Adds forecasts for non-Japan Asia, reasons for upgrade)

BEIJING, Aug 10 (Reuters) - Goldman Sachs (GS.N) on Monday raised its forecast for Asian economic growth this year and next based on a stronger outlook for the United States and China.

The bank revised its projections for gross domestic product growth in Asia ex-Japan, which were already above consensus, to 5.6 percent from 4.9 percent this year and to 8.6 percent from 7.8 percent in 2010.

Goldman said Asia would benefit from strength in China, which it now expects to grow 9.4 percent this year and 11.9 percent in 2010. Previously the bank had forecast 8.3 percent and 10.9 percent, respectively.

Explaining its upgrade, Goldman said Chinese growth momentum remained strong and policy tightening was behind the curve.

Michael Buchanan, the bank's chief economist for non-Japan Asia, said the National Development and Reform Commission and the State Council, China's cabinet, remained very cautious about any significant tightening.

"We believe policymakers will only choose to tighten more dramatically via significant hikes in policy rates once the consequences of above-trend growth become obvious (i.e., actual inflation or supply bottlenecks or significant asset price bubbles)," he said in a report.

This may mean that increases in interest rates will not come until next year, perhaps after discussions at December's annual economic policy-setting meeting, Buchanan added.

Premier Wen Jiabao said at the weekend that Beijing would stick to an appropriately loose monetary stance and proactive fiscal policy to achieve its goal of 8 percent GDP growth this year. [ID:nPEK220133]

That target looked out of reach until data for the second quarter started to show the impact of the government's 4 trillion yuan ($585 billion) stimulus spending and a record burst of lending by China's mainly state-owned banks.

Goldman said Asia would also draw strength from a rosier outlook in the United States.

The bank raised its 2009 GDP forecasts for Hong Kong, Malaysia, the Philippines, Singapore, South Korea and Taiwan, but kept its projections for Indonesia, Thailand and India unchanged. (Reporting by Alan Wheatley; Editing by Ken Wills and Chris Lewis)