The World Bank has raised its growth forecast for East Asian economies, excluding Japan, to 8.4 percent this year.
This was up by more than a full percentage point over the 7.3 percent estimate six months ago. According to World Bank, the upgrade was mainly due to the booming growth in China.
For Singapore, the growth forecast has also been revised upwards to 7.4 percent for 2007, up from the earlier estimate of 5.5 percent.
The World Bank is seeing strong growth for most economies in Asia this year, including Singapore.
This will be the second year in a row that economic growth in the region, excluding Japan, exceeds 8 percent.
This optimism is shared by World Bank's sister organisation, the International Monetary Fund, which sees Singapore's growth at 7.5 percent.
Ranil Salgado, Resident Representative, Singapore (APAC Dep), International Monetary Fund, said: "Singapore has continued to surprise at the upside. I think we all see it here in terms of increase in construction and also the financial services sector.
"In terms of manufacturing, we're seeing strong growth in the pharmaceuticals sector, which has more than offset some weakness in the IT area."
But growth is expected to be moderate next year, with the World Bank setting its forecast at 6.4 percent, due to an anticipated global slowdown amid the financial turmoil and increasing oil prices.
Still, economists said these downside risks would be balanced by growth in other Asian countries.
Manu Bhaskaran, CEO of Centennial Group, said: "If you're looking at developing Asia as a whole, I think you will see external demand weakening, but I suspect that domestic, particularly investment demand in Southeast Asia is going to be a lot stronger than expected.
"And I think the net effect is that in countries such as Thailand, Malaysia and Indonesia, you could well see a very moderate acceleration of growth next year, compared to this year." - CNA/so
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