But many economists believe that even the latest government forecast is too optimistic. Private-sector views range from Goldman Sachs Asia's forecast of a 0.3 percent contraction for 2001 to JPMorgan's more worrisome estimate of a 2.3 percent contraction. These figures lie in stark contrast to the fact that Singapore's economy grew by 9.9 percent last year. Indeed, of the IT-led Asian economies, Singapore is expected to post the lowest GDP growth this year, according to Consensus Economics, a company that polls private-sector economists.

"It is a foregone conclusion that the economy is sliding a lot faster than the official expectations," JPMorgan economist Rajeev Malik wrote in a recent report. "To meet even the low end of the official GDP-growth forecast the economy will have to shrink by a mere 0.7% in the second half. This is too little." Instead, Malik forecasts the economy will contract by slightly more than 6 percent in the second half of the year.

That's largely because total exports, heavily concentrated in the electronics sector, are the equivalent of 153.3 percent of GDP. Singapore "is the league leader in terms of exposure," notes Timothy Condon, chief economist at ING Barings. Recovery in Singapore depends on how fast its trading partners rediscover their appetite for Singapore's computer chips and other electronics goods. That's particularly true of the United States, which takes about 25 percent of the country's non-oil exports.

But don't expect a recovery soon. The third quarter got off to an appalling start. In July, non-oil exports suffered their worst contraction since December 1982, shrinking 24.2 percent year-on-year. Electronics exports--which account for about two-thirds of total exports--shrank by 32.5 percent year-on-year. Singapore's overall foreign trade contracted by 13 percent year-on-year in July. The Trade Development Board has revised its full-year forecast for total trade this year from a 7 percent - 9 percent expansion to a contraction of 2 percent -4 percent.

Malik predicts the official GDP forecast will be revised downward again after flash estimates for third-quarter GDP are released on October 10. He expects a second package of off-budget measures to help business and employment; the first S$2.2 billion ($1.2 billion) package was unveiled in July. "The magnitude of the downward revision to the official growth forecast and the increasing risk of disinflation turning into deflation should prompt the Monetary Authority of Singapore to shift its currency policy to an easing bias from the current neutral stance," he says.