Singapore economic growth may ease after expanding 17.9%

Euro debt crisis and US slowing economy threaten bid for becoming economically relevant in fast-changing world.

Singapore’s economy expanded less than previously estimated in the first half of 2010 and growth may “moderate” in the coming months, Prime Minister Lee Hsien Loong said.

The Southeast Asian nation’s gross domestic product rose 17.9 percent in the six months through June from a year earlier, Lee said in a televised National Day message in Singapore late Saturday. That compares with a record 18.1 percent pace reported in July. The economy may grow 13 percent to 15 percent in 2010, Lee said, reiterating an earlier forecast.

The island is in the running to be the world’s fastest- growing economy in 2010 amid an Asian rebound that has prompted neighbors including Malaysia and India to raise interest rates and Singapore to revalue its currency. Still, manufacturing growth slowed in June as Europe’s sovereign-debt crisis and slowing U.S. growth threatened the global recovery.

“Risks remain in the world economy, especially in Europe and the U.S.,” Lee said. “The global financial system is not fully mended. If the world economy turns bad, we will be buffeted. We need to stay vigilant and watch the developments worldwide.”

View the full story in Bloomberg.