Frederic Neumann, Co-Head of Asian Economics Research of HSBC, participates in a press conference at HSBC office building in Hong Kong, South China, April 19, 2011. [Photo / Xinhua]

HONG KONG - HSBC has upgraded its gross domestic product (GDP) growth forecast for Hong Kong and Singapore this year to 5.5 percent and 5.8 percent respectively, from their prior forecast of 5.2 percent, on the back of continuous strong demand from Chinese mainland.

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The two economies are much more tied to Chinese mainland demand than ever before, said Frederic Neumann, Co-Head of Asian Economics Research, HSBC. The closeness provides boost for local demand and help offset some of the risks from exports, he added.

Chinese mainland tourists continue to come to Hong Kong in record numbers, spend innumerous amounts in retail shops. It's the same in Singapore, which helps sustain the local economy, he said.X The GDP growth forecast for Chinese mainland in 2011 remained at 8.9 percent.

Looking at Asia in general, Neumann said supply disruption from Japan, high oil price and the lagged effect of tightening will be the three main risks for the region's financial market in the coming three month.

The earthquake will likely lower Japan's real GDP growth rate by 0.5 percentage point this year, and HSBC expected its real GDP to grow 0.9 percent in 2011, he said.