Singapore is looking forward to “good” growth this year after the island-state’s economy expanded in the first quarter at the fastest pace since at least 1975, Prime Minister Lee Hsien Loong said.

“I am happy with the very strong first-quarter growth. It reflects a rebound from the downturn last year, which is broad- based and robust,” Lee said in an e-mailed response to questions from Bloomberg News late yesterday. “Singapore is looking forward to good growth in 2010.”

Singapore raised its 2010 economic growth forecast for the second time this year yesterday as figures showed the $250 billion economy grew an annualised 32.1% in the first quarter from the previous three months. The central bank said it would undertake a one-time revaluation and seek a gradual and modest appreciation of the currency, joining other Asian economies in tightening monetary policy.

Stronger growth last quarter “reflects a rebound from the downturn last year, which is broad-based and robust,” Lee said. “Asia is doing well, particularly China and India. Our Asean neighbours expect economic recovery too.”

Singapore’s gross domestic product will increase 7% to 9% in 2010, the trade ministry said in a statement yesterday, compared with a previous prediction for growth of as much as 6.5%.

The Monetary Authority of Singapore, which uses the currency instead of interest rates to conduct monetary policy, said yesterday it will “re-centre the exchange rate policy band at the prevailing level” of the Singapore dollar, shifting to a stronger range for the currency to trade in. The central bank guides the Singapore dollar against a basket of currencies within an undisclosed band.

‘Momentum Slows’
“Domestic economic activity is likely to be sustained at a relatively high level, even as the growth momentum slows in the coming quarters,” the central bank said in a statement.

Asia’s economies will probably expand 7.5% in 2010 after growing 5.2% in 2009, which was the slowest pace in eight years, the Asian Development Bank said in a report this week. The 45 economies of developing Asia may grow 7.3% next year, the Manila-based lender predicts.

“We should make the most of this opportunity to upgrade our economy and make ourselves more competitive for the longer term,” Lee said.