Gross domestic product for April through June grew 19.3 percent from a year earlier when the economy was shrinking because of the global recession, the Trade and Industry Ministry said Wednesday. The growth was the fastest since the government began releasing quarterly GDP figures in 1975.
The ministry raised its forecast for the city-state's economic growth this year to a range of 13 percent to 15 percent from the previous forecast of 7 percent to 9 percent. It also raised its forecast for export growth as global demand has stayed strong amid Europe's debt and fiscal crisis.
"This should reinforce the view that fears from the eurozone crisis may be exaggerated," DBS bank said in a report.
Singapore, which has the highest percentage of millionaires in the world, is the first Asian economy to announce GDP results for the April-to-June quarter. The tiny island nation is often seen as a barometer of world demand because its economy - built on manufacturing and services like finance - is one of the most export-reliant in Asia.
Manufacturing in the April-June quarter recorded explosive growth of 45.5 percent compared with a year earlier.
"Growth was driven by a surge in the output of biomedical manufacturing, as well as a strong expansion in electronics underpinned by healthy worldwide demand," the ministry said in a statement.
Construction grew 13.5 percent while services expanded 11.4 percent. The opening of two casino resorts this year by Las Vegas Sands and Malaysia's Genting have helped attract record visitors.
Tourists and locals alike are buying more. Mastercard said its cardholders spent 23 percent more last month from a year earlier amid the start of an annual nationwide retail sale.
The ministry revised first-quarter GDP growth to 16.9 percent from 15.5 percent. The second quarter results were preliminary, based on data from April and May. On an annualized and seasonally adjusted basis, the economy grew 26 percent in the second quarter.
The economy will likely slow in the second half of the year as the U.S. and Europe battle high unemployment and fiscal austerity measures.
"The momentum of the global economic recovery has moderated, although a double-dip recession remains unlikely," the ministry said.
Citigroup said it expects Singapore's economy to grow 15.5 percent this year and 4.6 percent next year.