"Such a high US estimate is probably due to mistaken perceptions, rather than based on factual analysis of the actual contributions," said a Singapore Department of Statistics report Mar 22.

The report said government-linked companies contributed 12.9 percent to the economy in 1998, and that foreign companies accounted for an estimated 42 percent of GDP.

Estimates for 1999, 2000 and 2001 were not yet available, said Tan Poh Ching, an official from the Department of Statistics.

US Embassy spokesman Thomas Gradisher said the embassy did not immediately have a comment on the Singapore report.

Singapore's government owns majority stakes in most of the country's biggest companies, like Singapore Telecommunications Ltd. and Singapore Airlines Ltd..

Because of the "government's intention to reduce its investment" in government-linked companies, "their contribution to Singapore's GDP is likely to decline," the report said.

Some analysts say government links are hampering Singapore companies' attempts to expand abroad through mergers and acquisitions due to fears that the companies could have a political agenda.

Singapore Deputy Prime Minister Lee Hsien Loong said earlier this month that the government was planning to reduce its 78 percent stake in SingTel.

The US report, titled Singapore Country Commercial Guide FY2001, said "there is currently debate" on whether Singapore's government-linked companies "could continue to do business as usual in an increasingly globalized new economy of cross-border alliances and mergers."

The US report said Singapore's private sector complained of being "crowded out" as government-linked companies expanded.

The Singapore report said this was just a "perception" created by the government-linked firms' success in areas such as telecoms and transportation.