By Bettina Wassener, published in The New York Times
HONG KONG — Singapore is on pace to be among the world’s fastest-growing economies this year, after a spurt in the first half prompted the government on Wednesday to project an expansion of as much as 15 percent for 2010. That would be four times the pace at which the United States economy is expected to grow.
The new forecast, issued by the Ministry of Trade and Industry, is much higher than its earlier estimates of 7 to 9 percent growth and highlights the speed with which many parts of the Asia-Pacific region are bouncing back from the global financial downturn.
With the notable exception of Japan, most of the region is experiencing solid growth this year, even though momentum is likely to ebb as the year progresses.
Australia also raised its projection on Wednesday for economic growth, to 2.25 percent for the year, from a previous forecast of 2 percent.
And Thailand nudged up its main interest rate by a quarter of a percentage point, to 1.5 percent, joining the half-dozen other Asia-Pacific countries that have begun to raise borrowing costs in recent months as their economies have picked up steam.
China, at 10.5 percent, and India, at 9.4 percent, have the fastest-growing major economies in the region, according to projections issued by the International Monetary Fund last week.
Analysts expect that statistics to be released Thursday will show that the Chinese economy expanded 10.5 percent in the second quarter, from the level of a year earlier — a slightly softer pace than the 11.9 percent expansion in the first quarter.
Still, it easily outpaced growth elsewhere in the world. The I.M.F. expects the United States to grow only 3.3 percent this year and the euro zone to manage a mere 1 percent.
Singapore is one of the Asia-Pacific region’s most open economies, serving as a major financial center and as an important production and research hub for pharmaceuticals and electronics.
Singapore’s dependence on overseas demand meant its economy was hit particularly hard by the global financial crisis — the economy contracted 1.3 percent last year — but it also means it is now exceptionally well positioned for a rebound.
Data for the second quarter of this year, released Wednesday, showed that the Singaporean economy had soared 19.3 percent from the level of the previous three months and 26 percent from the second quarter of last year — streaking past analysts’ expectations.
The main driver was the manufacturing sector, which expanded 46 percent, thanks to gains in biomedical production, as well as strong growth in the electronics cluster, which benefited from healthy worldwide demand, the Ministry of Trade and Industry said.
The services sector benefited from tourism inflows after the opening of two casino resorts this year.
“The casinos obviously did their bit,” Frederic Neumann, regional economist at HSBC in Hong Kong, said in a note. “We have long been bullish on Singapore’s growth outlook this year. But these numbers are running well ahead of even our estimates” of 9.7 percent growth in gross domestic product this year.
“Exports and broader activity, of course, are bound to slow over the second half of the year,” he added. “Still, domestic demand continues to expand briskly, which should help to offset some of the emerging weakness in export markets.”