Prime Minister Goh Chok Tong's office said in a statement that two salary cuts of up to 10 percent each implemented in 2001 and 2003 to cope with the economic downturn would be fully restored.

"The economy has recovered and is growing again. The government will therefore restore the salaries of the appointment holders and administrative officers to their levels before the November 2001 salary cuts in two steps," it said.

The first of the pay rises will take effect on July 1, while the second will start at the beginning of next year.

All goverment-appointed political, statutory and judicial employees, as well as those in the administrative service, will receive the pay rises.

Singapore, a wealthy city-state in Southeast Asia, benchmarks government salaries with the private sector in an effort to attract the best talent and avoid corruption.

Singapore's economy is officially expected to grow by between 5.5 and 7.5 percent this year.

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