Morgan Stanley has revised its economic growth forecast for Asia due toe continued uncertainty in the Eurozone and weaker domestic demand.  The bank downgraded its growth forecast for Asia excluding Japan to 6.9 percent from 7.3 percent for 2012. The US bank said in a report has revised its forecast for the second time in three months.

"Since we downgraded our regional growth outlook in August 2011, we have been constantly worried about the increasing downside risks to growth. In addition to further evidence of weakening domestic demand, the external environment in Europe has made us more concerned about the region's growth outlook," Morgan Stanley said.

The bank said that because of the recessionary trends in Europe and the US economy, the outlook for the Asian region in slowdown. The eurozone is facing a sovereign debt crisis with Greece among the most hit but the crisis is not threatening to spread to larger economies of Italy and Spain.

Morgan Stanley said Asian governments are now expected to take targeted fiscal policy measures and ease borrowing costs in order to boost domestic growth. It also expects "limited" interest rate cuts in India, Indonesia, South Korea, Malaysia and Thailand in the coming year.