Supported by robust gains in trade and tourism, Signapore’s economy, along with its related exchange traded fund (ETF), grew at a phenomenal rate in the first quarter, prompting the government to revise upward this year’s growth forecasts.

Singapore’s economy expanded 32.1%, its quickest pace in about 35 years, during the first three months of 2010, reports Alex Kennedy for BusinessWeek. The government revised its 2010 forecast to between 7% and 9% from between 4.5% and 6.5%. [Singapore ETFs: Slinging Up to Its Full Potential?]

Industrial production surged 139% from the previous quarter, led by the electronics and biomedical sectors while services grew 11%. The economy relies on trade, finance and tourism.

The Central Bank has shifted its exchange rate target from a 0% appreciation of the Singapore dollar to a more “modest and gradual” appreciation in an attempt to obviate inflation. The government expects inflation to be between 2.5% and 3.5%.

After the Central Bank decided to shift its exchange rate target, Singapore’s currency shot up to a 20-month high, according to The New York Times. Economists estimate that the currency had been revalued 1.2% to 1.4%, and some predict that the currency could reach 1.36 to the U.S. dollar with months, or even approach a record of about 1.345. The Singapore dollar hit 1.3784 against the U.S. dollar recently and has gained 1.9% so far this year.

Singapore’s Central Bank sets its policy only twice a year, and it would have risked being behind if it hadn’t tightened its monetary policy now. The Central Bank manages the Singapore dollar in a secret trade-weighted band against a basket of currencies rather than setting interest rates.

For more information on Singapore, visit our Singapore category.

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Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.