"The global outlook is positive: the US, China, India and Japan are all doing well," Prime Minister Lee Hsien Loong said in a statement released Saturday, Jan 28. "I expect our economy to continue prospering. The general feel in the market is that things are looking up."

Lee acknowledged that some older Singaporeans and lower-income families are in difficult financial circumstances, but said efforts will be made to help them. Some of those measures are expected to be revealed when Lee announces a new budget in Parliament on Feb. 17. Analysts believe Lee could call parliamentary elections in the next few months.

Singapore, an international business hub, is forecasting its trade-dependent economy will grow 3-5 percent in 2006 after better-than-forecast growth of 5.7 percent in 2005.

Lee urged Singaporeans to strengthen ties among races in the tightly controlled city-state, which has large Malay and Indian minorities. Singapore suffered race riots in the mid-1960s, but has been peaceful since then. Government officials, however, are concerned that Islamic terrorists could target Singapore, inflaming racial tensions.

"Year by year, we have strengthened our inter-racial understanding and harmony," Lee said. "But it would be a grievous mistake to take this for granted, especially when we, like many other countries, face the threat of terrorists who seek to destabilize our society. An attack can tear apart our social fabric."

Singapore, a close U.S. ally, recently staged simulated attacks on its transport system in a drill testing the preparedness of its security and medical agencies.

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