Horrendous... it's highly likely that we will go into a recession again in the fourth quarter

Pamela Wong, MMS International

The figures show that the output of the trade-dependent island state between July and September grew by just 3.7% from the level of a year earlier.

While respectable by European standards, the levels are well down on the 7%-plus that economists were expecting.

"Horrendous," said Pamela Wong from MMS International. "It's highly likely that we will go into a recession again in the fourth quarter."

The government blamed the slowdown in part on a poor performance from the chemicals sector.

The government's 3-4% target for annual growth was already looking shaky, partly because of a tough year for the island economy as the key electronics sector slumped and partly because of the knock-on damage from the US West Coast ports lockout.

But now many economists are saying that even achieving the bottom end of the range will be a challenge.

Bad tidings

The signs of trouble for Singapore have been multiplying in recent months.

Unemployment is turning into a serious problem, as government figures suggest it could go up by a quarter by the end of 2002, from 4.1% to 5.5% of the workforce.

The numbers, issued last month by the Ministry of Manpower, warned that the rise could prove structural as older and less well-trained workers, unsuited to new economy businesses, would be next to lose their jobs.

The last recession, the worst since 1964, only finished in the April-June quarter of this year.

It produced a 2% contraction in 2001, following blistering 10.3% growth the year before.