Singapore already considered itself in recession. But this marks the second consecutive down quarter, meaning it meets the textbook definition.

The city-state's GDP shrank 0.9 percent in the second quarter, after growing 4.5 percent in the first.

Its technology-intensive and export-driven economy has suffered the worst in Asia during the current economic downturn.

The current poor performance is the flipside of a business makeup that meant it was one of the first to recover from the Asian financial crisis.

The third-quarter figures matched an estimate by the Ministry of Trade and Industry made in early October, based on the first two months of the quarter.

Experts were encouraged that the slump hadn't gotten any worse. In particular, the numbers didn't worsen as the effects of the September 11 attacks started to show in the last month.

But economists still characterized the showing as abysmal.

"There is no good news here," Tan Kan Yong, an economist with UOB Kay Hian told Reuters. He had predicted an even greater drop of 6 percent but said the actual figure was little improvement. "It's still one of the worst declines so far."

The trade ministry said goods-producing industries are suffering a particularly sharp slump. They shrank by 15 percent, with manufacturing making up half that category.

Singapore's economy grew 9.9 percent last year. But it has turned down with a vengeance in 2001, with unemployment hitting 3.8 percent in the third quarter, a big leap from 2.6 percent in the second quarter.

The ministry reiterated its forecast for the year, predicting a 3 percent decline in GDP. It revised that in October, from a slight drop.

Singapore stocks weathered the bad growth numbers. The Straits Times index hit a two-month high in morning trade and was up as much as 1.3 percent.

But it sold off sharply late in the day on profit taking, the index closing down 0.7 percent at 1422.17.

Singapore has a bright spot ahead of it on Saturday, as the island flicks the switch on its Christmas lights.