The agency had previously been forecasting growth of 5.3% for the year, but said that it had increased the figure because of growth in Europe.
Doug Flynn, chief executive of Carat's parent company Aegis, said: "This growth is being lead by the US and European markets, although growth in Asia Pacific remains robust.
"We have also raised our forecasts for 2005 and now expect to see global adspend growth of 5% as early signs from advertisers suggest that their confidence remains stable."
In the UK, Carat is expecting 2004 adspend to rise by 4.6%, but warned that the first signs of weakening consumer confidence and a softer housing market suggest that economic activity could slow down in the future.
Across Europe as a whole, the ad market is predicted to rise by 4.4%.
Stateside, where the Presidential candidates are reported to have spent more than $300m (£168m) on advertising, Carat is forecasting a 5.8% rise in adspend for the year, compared with its earlier figure of 5.3%.
In a break from accepted wisdom, Carat said that conversations with clients showed little evidence that the Olympic Games have been a significant driver of global adspend.
It said that only nine countries out of 46 surveyed for the report showed a rise in adspend around the time of the Olympics.
However, the Olympics had a much bigger impact in the US, where NBC saw record ratings and interest from advertisers. The US television network sold $1bn worth of advertising across its seven channels during the games, netting the General Electric-owned station $50m.
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