Singapore looks set to become the world's fastest growing economy in 2010 after the government upgraded its forecast to a blistering 13 to 15 per cent annual expansion, economists said on Wednesday.
The new estimate, up sharply from an earlier prediction of 7.0 to 9.0 growth, outstrips forecasts of around 10 per cent growth in regional powerhouse China and comes despite lingering worries over the US and European economies.
"Singapore will be the strongest-growing economy in Asia for the year and probably in the world," said Song Seng Wun, a Singapore-based regional economist with CIMB Research.
He said the new growth forecast was "realistic" despite a projected slowdown in the second half because gross domestic product (GDP) expansion in the first six months of the year was likely to be 18 per cent.
Asia's other export-oriented economies are also expected to post healthy increases this year, but Singapore has other growth drivers including its tourism and financial services industry, he said.
Singapore opened two huge casino resorts tin 2010 that have proved a popular draw.
David Cohen, a regional economist with research house Action Economics, said Singapore will "probably come on top of the charts worldwide."
Cohen, however, said this should be seen in the context of Singapore's GDP contraction of 1.3 per cent last year due to the global economic crisis, while China's GDP grew at around 9.0 per cent in 2009.
Robust demand for Singapore's manufactured exports, particularly biomedical products and semiconductors, resulted in the sharp upgrade for the trade-driven island's GDP growth forecast.
Growth in the first quarter was 16.9 per cent from a year ago, the Ministry of Trade and Industry said, while second quarter expansion is estimated at 19.3 per cent.
In a separate statement the trade promotion body International Enterprise (IE) Singapore said non-oil domestic exports jumped 29 per cent in June from a year ago, faster than the 24 per cent figure the month before.
Electronics exports, including computer chips, climbed 44 per cent in June, after rising 39 per cent in May.
Non-electronics shipments, among them pharmaceuticals, petrochemicals and specialised machinery, were up 21 per cent in June, compared with the 16 per cent rise the month before, IE Singapore said.
The country's exports are now expected to advance by between 17 and 19 per cent in 2010, up from the previous forecast of 15 to 17 per cent.
It cited strong trade with Asian economies led by China as a key factor for the upgrade of the export forecasts.
The trade body noted China's surging imports, with Beijing's trading partners expected to benefit from rising demand from Chinese consumers.
The trade ministry said growth would moderate in the second half of the year due to problems in two key markets for Singapore's exports, the United States and the European Union.
"In the US, there are now signs of a slowdown in the labour market following the recovery earlier in the year. This has affected consumer confidence. In the EU, domestic demand remains depressed as concerns over the sovereign debt crisis persist."
Cohen said however that while the global economy is likely to slow down, he does not see it slipping into another recession.
"So the Singapore government's projection for full-year growth seems within reach," he said.