Here’s some food for thought for anyone who says Singapore’s impressive GDP growth is entirely due to its China connections: Singapore’s GDP overtook Hong Kong’s in the first quarter this year and is projected to be larger at the end of the year.

Singapore’s quarterly nominal GDP was US63.9 billion, 10% higher than Hong Kong’s at $57.9 billion, according to a report by Bank of America Merrill Lynch economist Chua Hak Bin. It’s worth noting that Singapore’s dollar is free-floating while Hong Kong’s is pegged to the USD. The S$┬áhas gained 8.2% against the Hong Kong dollar in the past year and 23.3% in the past decade. Still, Chua says it would have been “far fetched” to predict such a development just a decade ago, given Hong Kong’s greater proximity to China and Singapore’s more volatile neighborhood at the time of the Asian financial crisis.

Singapore’s population is also just 5.1 million, while Hong Kong’s is 7.1 million. The two find themselves frequently compared due to their status as independent (or autonomous) city-states, majority ethnic Chinese populations and the significant role played by the financial services sector in both places. Singapore recently revised its GDP growth forecast for 2011 up from 4-6% to 5-7%. Hong Kong is still no slouch, with 7.2% growth in Q1 2011 and its own upward-revised annual projection of 5-6% (from 4-5%).

source & article: Economic Times (India)