Economic growth in Asia is projected to remain steady at 5.4 percent in 2014 and 5.5 percent in 2015, the International Monetary Fund (IMF) said in a report published on Monday.

External demand is set to pick up alongside the recovery in advanced economies, and domestic demand should remain solid across most of the region, said the IMF's Regional Economic Outlook for Asia and Pacific.

The report - Sustaining the Momentum: Vigilance and Reforms - said that the region has strengthened its resilience to global risks and will continue as a source of global economic dynamism.

Provided it stays the course on reforms, Asia is well positioned to meet the challenges ahead and to secure the region's position as the global growth leader, the report said.

Despite the growth momentum, the IMF report also warned that Asia will face higher interest rates and potential bouts of capital flow and asset price volatility with the expected upcoming tightening of global liquidity and Asian economies' external risks of a sudden tightening of global financial conditions.