By Rujun Shen and Saeed Azhar
SINGAPORE (Reuters) - Singapore's ruling party romped to a strong election victory on Friday and increased its share of the vote and seat tally as it brushed off an opposition challenge in the city state's most hotly contested polls.
The People's Action Party (PAP), which has ruled since independence in 1965, was always expected to win but opposition parties, contesting in all seats for the first time, had hoped to gain enough votes to challenge its domination of politics.
"We are very grateful, we are very happy and at the same time, we are very humbled by the result," Prime Minister Lee Hsien Loong told cheering supporters as results flowed in showing the extent of his party's win.
"Tomorrow will be better than today."
The results showed the PAP won about 69.9 percent of the vote, above the 60.1 percent it won in the last election in 2011, which was its worst-ever showing. In the last parliament it had 79 of a total 87 seats.
The ruling party won 83 of the 89 seats in an expanded parliament, while the opposition Workers' Party ended up with six seats, less than the seven it held in the outgoing parliament.
The PAP had been hoping that a sense of patriotism inspired by this year's 50th anniversary of independence and respect for the country's independence leader, former premier Lee Kuan Yew, who died in March, would work in its favor.
Lee was the father of current Prime Minister Lee Hsien Loong.
The elder Lee drew praise for his market-friendly policies, but also criticism at home and abroad for his strict controls over the press, public protest and political opponents.
SWING BACK TO SAFETY
The election came as economic risks are in focus due to uncertainties stemming from China's economic slowdown and wobbly markets.
DBS Bank, Singapore's biggest lender, this week cut its economic growth forecast for Singapore to 1.8 percent, below the official forecast of 2-2.5 percent.
"In the end I would say there was this flight to safety given the economic uncertainties," said Eugene Tan, a political analyst and associate professor at Singapore Management University.
Years of strong growth have turned the island nation into an international financial hub with spotless streets and malls, well-tended parks and living standards unmatched in Southeast Asia.
But that success and an influx of foreign workers have brought high property prices, crowded public transport, and a widening wealth gap which have fueled resentment among many in a city that surveys rank as one of the world's most expensive.
A total of eight opposition parties had hoped to take advantage of the grumbling and big crowds had turned out for opposition rallies during the campaign, in which candidates focused on basic issues of jobs, healthcare and housing.
The PAP was forced to shift slightly to the left after its poor showing in 2011 to address an emboldened opposition's calls for a better deal for middle- and lower-class voters.
The government launched a multi-billion-dollar healthcare insurance program for the elderly, introduced cooling measures for the property market and curbed the flow of foreign workers.
The convincing victory on Friday could lead to a government reassessment of such policies.
(Additional reporting by Aradhana Aravindan, Chyen Yee Lee, Fathin Ungku, Edgar Su, Anshuman Daga and Christophe Van Der Perre; Editing by John Chalmers and Ralph Boulton)