Singapore on Thursday stuck to its economic growth projections of 1.0-3.0 percent for 2012 but warned there was a chance of a "disorderly sovereign debt default" in the eurozone that could hit exports.
The Ministry of Trade and Industry also said weakness in the US economy was another concern for Asia's export-dependent nations including Singapore.
Its comments came as it revealed the economy grew 10 percent in the January-March first quarter from the previous three months thanks to a surge in manufacturing.
"A disorderly sovereign debt default in the eurozone cannot be ruled out at this stage," the ministry said.
"If it materialises, there will be considerable downsides for the global economy and Singapore's externally oriented industries."
The warning comes as global financial markets are rattled by fears that debt-ridden Greece could end up exiting the eurozone after a backlash against pro-austerity parties in May 6 elections.
Singapore's trade ministry said that even a rise in Asian consumer spending would not be sufficient to cushion the impact of weaker demand in the key export markets of the United States and Europe.
"In Asia, notwithstanding the support from rising domestic demand, growth will be curtailed by lacklustre export performances amidst the external headwinds," it said.
"The eurozone economies will remain weak, as ongoing fiscal austerity and bank deleveraging continue to dampen domestic demand in the region."
The ministry said Singapore's gross domestic product (GDP) grew an annual 1.6 percent in the first quarter ended March and 10 percent on a quarter-on-quarter basis.
The impressive expansion was driven by the manufacturing sector, which grew 19.8 percent on a quarterly basis, a huge turnaround from the 11.1 percent decline posted from October to December.
"This turnaround was driven by increased production across all key manufacturing clusters, notably electronics and precision engineering," the ministry said.
In a separate report, the trade promotion agency, International Enterprise Singapore (IE Singapore), said exports were up an annual 6.1 percent in the first quarter, reversing a 2.7 percent fall in the final three months of 2011.
However, IE Singapore said it was also keeping this year's growth forecast for non-oil domestic exports and total trade at between 3.0 and 5.0 percent because "uncertainties remain in the eurozone".