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SINGAPORE, usually touted as Asia's economic beacon, has the dubious distinction of now being the region's weakest economy, investment bank Barclays Capital said Tuesday, June 18.

The trade-dependent republic slumped into recession last year, and the Barclays report, following worse-than-expected trade figures this week, held little hope for a rapid recovery.

"The crucial non-oil domestic exports (NODX) data is failing to exhibit the clear trend of strength seen in regional competitors such as South Korea, Taiwan and China," Barclays said.

The NODX for May shrank 6.8 percent from the same month last year, reversing April's 6.6 percent gain.

The figures followed Singapore reporting negative economic growth of 1.7 percent for the first quarter from a year earlier, while Hong Kong had a far milder drop and Malaysia posted growth, the report said.

"We fear that Singapore may retain the unwanted accolade of Asia's laggard in the second quarter as economic data over this quarter disappoints."

In addition to a disappointing NODX, just released retail sales figures for April showed a 4.2 percent fall for the seventh consecutive month of decline.

Barclays said the downturn in private consumption may have "considerably further" to run.

"Crucially, Singapore's property market is still deflating... and the unusually high proportion of Singaporean household wealth tied up in property leaves the wealth effect the key determinant of consumer confidence."

About 85 percent of Singaporeans own their homes, with a large proportion using pension fund retirement accounts to leverage themselves into the market.

After robust 10 percent growth in 2000, the Singapore economy contracted two percent last year.

The government is cautiously forecasting growth at the upper end of a two to four percent range this year.

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