Singapore - Singapore further downgraded its economic growth forecast to 2.5 per cent for this year, down from 3 per cent previously forecast, the Ministry of Trade and Industry (MTI) said on Friday.

Singapore had in October revised this year's growth to 3 per cent, down from an earlier predicted 4 per cent and 5 per cent.

In 2009, the MTI sees Singapore's gross domestic product (GDP) ranging between a contraction of 1 per cent and growth of 2 per cent.

Singapore's GDP contracted by 0.6 per cent in year-on-year terms in the third quarter of 2008, said the MTI.

On an annualised quarter-on-quarter basis, growth declined by 6.8 per cent, compared to a fall of 5.3 per cent in the second quarter.

The largest contraction came from the manufacturing sector, with the decline led by the electronics and biomedical sciences segments.

"The contraction in global demand has hit regional economies too. As a result, Singapore's trade volumes and other indicators of regional demand, including visitor arrivals, have fallen," said the MTI in the statement.

All these developments will further dampen Singapore's economic growth in the remaining months of 2008, it added.

This year's trade growth is being maintained at 9 per cent to 11 per cent while non-oil domestic export (NODX) is expected to contract between 7 per cent and minus 5 per cent compared with earlier projection of minus 4 per cent to minus 2 per cent, said the International Enterprise Singapore in another statement on Friday.

Next year's trade was expected to decline to be between minus 8 per cent to minus 6 per cent while NODX is expscted to contract by about 1 per cent or have a growth of 1 per cent.

The city state's NODX declined by 8.5 per cent in the third quarter of this year due to lower electronic and non-electronic exports, it said.

Singapore's trade rose by 16 per cent in the third quarter of this year to 253 billion Singapore dollars (165.11 billion US), with growth mainly coming from the oil trade. Trade growth in the first three quarters was 17 per cent. (dpa)