The International Monetary Fund (IMF) on Tuesday said that China's economy is expected to grow by 8.2 percent this year, signaling a soft landing even with the drag from external demand.

Investment and private consumption remained strong in China, supported by solid corporate profits and rising household income, said the IMF in its latest World Economic Outlook report (WEO).

While the spillovers from the European debt crisis had damaged external demand, China's robust domestic demand helped offset the drag on growth of slowing exports, noted the report.

Moreover, the growth of Chinese consumer prices will fall to 3.3 percent this year after a 5.4 percent gain in the previous year, it said.

China is also in face of internal risks of balance sheet vulnerability from slowing real estate and export sectors, the report said. "They appear manageable on their own, but a large external shock could bring these risks to the fore, precipitating a decline in investment and activity in China," it said.

In addition, the Fund also projected China output will grow higher at 8.8 percent in 2013.

With respect to Asia, economy activity in the region slowed during the last quarter of 2011, reflecting both external demand decline and domestic developments, it said. Slowing exports, particularly to Europe, are dampening the region's growth prospects, it added.

However, a soft landing is expected in the whole Asia region given robust domestic demand, favorable financial conditions and room for policy easing, the report said.

The region is expected to see a growth rate of 6.0 percent in 2012 before gradually recovering to 6.5 percent in next year, it added.