Singaporean growth probably exceeded 20% on exports and casinos

Singapore’s strengthening economy has added to an Asian rebound that prompted central banks to raise interest rates in recent weeks, even amid concern that Europe’s debt crisis will slow the global recovery. The nation has raised its GDP forecast twice this year and Credit Suisse Group AG and Oversea-Chinese Banking Corp. predict the island may overtake China as Asia’s fastest-growing economy in 2010.

“The strength of the first-quarter recovery took most by surprise, and Singapore could see an even more impressive second quarter, judging by the latest manufacturing data,” said Alvin Liew, a Singapore-based economist at Standard Chartered. The country also benefited from “robust tourist arrivals,” lured by new attractions, he said.

Singapore’s manufacturing increased an average 45 % in the first five months of 2010, after declining an average 13 % in the same period last year. Pharmaceutical output has at least doubled every month from March to May.

“Pharmaceuticals and electronics did very well last quarter, while trade services and tourism arrivals helped beef up growth,” said Enrico Tanuwidjaja, a regional economist at OSK-DMG Group in Singapore. “We are expecting the momentum in manufacturing to slow in the second half.”

The performance of Singapore’s pharmaceutical industry is volatile as production swings by companies such as Sanofi- Aventis SA can cause industrial output to fluctuate.

The opening of Singapore’s two casino resorts this year, which include a theme park and convention centers, has contributed to record tourist arrivals every month this year through May and is helping fuel employment.

The economy probably grew 17.3 % in the second quarter from a year earlier, according to the median estimate of 13 economists surveyed by Bloomberg.

Singapore’s trade promotion industry will also release export figures tomorrow. Overseas shipments may rise 22.6 % in June from a year earlier, after a 24.4 % gain in May, according to the median estimate of 10 economists. Non- oil domestic exports will probably gain between 15 % and 17 % in 2010, the government said in May.