SINGAPORE, Mar 28 (Reuters): Asia's economic growth is losing steam this year as weakening demand from the United States and Europe hits the region's exports, while rising inflation heralds further currency gains, a Reuters poll shows.

China's economy is on track for its sixth straight year of double-digit growth, but the pace of expansion is clearly slowing and that would reduce its appetite for goods from the region that are ultimately destined for the United States and Europe.

"The big concern now is that the US economy may drag down Europe and Japan as well and deal a heavy blow to China's exports," said Lin Songli, an economist with Guosen Securities in Beijing.

Of 12 economies surveyed in the Asia-Pacific, excluding Japan, economists downgraded their expectations for gross domestic product growth in 11 countries compared with a similar survey carried out in December. Growth for the island of Taiwan was expected to stay unchanged.

Meanwhile, economists raised their inflation forecasts for the year across the region, the quarterly poll found.

China's economic growth would slow to 10 percent in 2008 from 11.4 percent last year, the first slowdown in nearly a decade.

India's growth was expected to slow to 8.1 per cent in 2008/09 from an estimated 8.7 per cent in the previous fiscal year, undermined by a swelling trade deficit and high interest rates designed to fight off inflation.

Rising inflation, driven by oil and food costs, has been the main policy concern in Asia, proding regional leaders to tolerate currency appreciation that helps curb import costs, said Yiping Huang, chief Asia economist at Citigroup in Hong Kong.

"However, most Asian economies already show initial signs of a slowdown and, given the recent sharp deterioration of the US economy, downside growth risks are soon likely to be the main concern," he said in a research report earlier this week.

Citigroup has cut its forecasts for Asia's 2008 economic growth to 7.6 per cent from 8.2 per cent, but lifted its inflation outlook to 5.1 per cent from 4.6 per cent.

Asia ex-Japan managed to grow a healthy 8.8 per cent in 2007 despite the US economy being hit hard by a deteriorating housing sector as regional exports were not immediately affected by the unfolding subprime mortgage crisis, Huang said.

But the housing crisis has started to cast a pall over consumer spending and Asia's exporters will likely feel the pinch from weaker global demand in the second quarter, probably in May or June, he said.

South Korea's economy could slip to a 3-year low of 4.8 per cent in 2008 while growth in Singapore could slow to 5.6 per cent this year from 7.7 per cent in 2007, the poll showed.

But in some Southeast Asian countries, hopes are running high that investment will pick up, supported by government outlays.

Thailand's growth is expected to slow moderately to 4.6 per cent in 2008, but domestic confidence has been given a lift by the return to democracy after smooth elections in December.

Prime Minister Samak Sundaravej's new government has moved quickly to unveil big stimulus packages aimed at picking up the expected slack from slowing export growth, but the effect will not be immediate, analysts said.

Inflation remains elevated in most Asian countries as oil and food prices surge, hitting its highest level in a quarter of a century in Singapore and reaching a nearly 12-year high in China, forcing policy makers to tighten monetary conditions.

But the Federal Reserve's aggressive policy easing has tied the hands of Asian central banks -- raising interest rates would further widen the yield differential with the United States, attracting more capital inflows and further lifting prices.

The Fed has slashed interest rates by a staggering 300 basis points since September to 2.25 percent, which is lower than policy interest rates across all emerging Asian countries.

Taiwan's and Australia's central banks have raised interest rates this year, while monetary authorities elsewhere in Asia have relied on currency appreciation to tame inflation.

Indeed, the poll found that most Asian currencies would appreciate further against the dollar this year, led by an expected 10 percent jump in the Thai baht and an 8 percent rise in the Malaysian ringgit and Taiwan dollar

But the global credit turmoil could fuel risk aversion and blunt the rise in some Asian currencies eventually, analysts say.

"The ringgit appreciation may not be sustained," said Forecast economist Vishnu Varathan. "Liquidity conditions are pretty bad. When investors do pull out, they will probably pull out of emerging markets first."