SINGAPORE (AFP) - Singapore looks set to become the worlds fastest-growing economy in 2010 after the government upgraded its forecast to a blistering 13 to 15 percent annual expansion, economists said Wednesday.
The new estimate, up sharply from an earlier prediction of 7.
0 to 9.
0 percent, outstrips forecasts of around 10 percent 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 percent.
Asias 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 told AFP.
Singapore opened two huge casino resorts this year 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 Singapores GDP contraction of 1.
3 percent last year due to the global economic crisis, while Chinas GDP grew at around 9.
0 percent in 2009.
Strong second-quarter GDP figures reinforce the view that fears from the eurozone crisis may be exaggerated, DBS Bank said in a note.
As Singapore is the most sensitive to headwinds in the global economy, this is good news for investors looking to put on risk again, DBS added.
Hence, sentiment should remain constructive, not only for the Singapore dollar, but also other Asia ex-Japan currencies and commodity currencies linked to a positive growth outlook.
Robust demand for Singapores manufactured exports, particularly biomedical products and semiconductors, resulted in the sharp upgrade for the trade-driven islands GDP growth forecast.
Growth in the first quarter was 16.
9 percent from a year ago, the Ministry of Trade and Industry said, while second quarter expansion is estimated at 19.
3 percent.
In a separate statement the trade promotion body International Enterprise (IE) Singapore said non-oil domestic exports a barometer of the health of the economy jumped 29 percent in June from a year ago, faster than the 24 percent figure the month before.
Electronics exports, including computer chips, climbed 44 percent in June, after rising 39 percent in May.
Non-electronics shipments, among them pharmaceuticals, petrochemicals and specialised machinery, were up 21 percent in June, compared with the 16 percent rise the month before, IE Singapore said.
The countrys exports are now expected to advance by between 17 and 19 percent this year, up from the previous forecast of 15 to 17 percent.
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 Chinas surging imports, with Beijings 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 Singapores 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 he does not see the global economy slipping into another recession.
So the Singapore governments projection for full-year growth seems within reach, he told AFP.