The city-state's deepening recession, induced by the US-led global economic slump, has hammered Singapore's workforce due to company closures, retrenchments and hiring freezes.

"With the protracted slump in global electronics and uncertainties in the US economy feeding deeper into the Singapore system, the positive earnings growth posted so far may come to a standstill when the year draws to a close as companies exercise wage restraint," the ministry said.

"Unemployment rate could rise to around 4.5 percent by the end of the year and is expected to worsen in the year ahead as the next batch of new entrants join the labour market, adding to the existing pool of job seekers," it said in a report.

This year's projected 4.5 percent unemployment rate will exceed the 4.4 percent recorded in 1998 at the height of the Asian financial crisis. During the crisis, Singapore was cushioned to some extent because of continuing strong technology exports to the US.

Singapore, previously one of Asia's most vibrant economies, fell into a recession in mid-2001 and is facing an expected 3 percent contraction in its gross domestic product this year.

From January to September, 17,247 people were thrown out of jobs, nearly half of them in the three months to September alone when the unemployment rate accelerated to 3.8 percent, the ministry said.

An expected 25,000 people are expected to have been retrenched for the entire year.

More than 60 percent of those retrenched in the September quarter came from the manufacturing sector, which has borne the brunt of the downturn because of its dependence on electronics exports to the United States.

Last week, Singapore's National Wages Council issued new labour guidelines backing "severe" pay cuts to help companies ride out the recession, with retrenchments recommended only as a last resort.

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