Figures released by the Ministry of Trade and Industry showed gross domestic product (GDP) in the March quarter grew 2.5 percent from a year ago, better than official preliminary estimates of 2.4 percent but still the weakest rate since the third quarter of 2003.

It was also much slower than the 6.5 percent expansion registered in the December quarter.

On a quarter-on-quarter basis, GDP in the three months to March shrank 5.5 percent after a 7.9 percent gain in the December quarter. It was the first quarterly decline since the second quarter of 2003.

"In view of the first quarter's weaker-than-expected economic performance, it would be unrealistic to maintain the official forecast range of 3.0-5.0 percent," Friedrich Wu, director of the ministry's economics division, said at a media briefing.

"Such a growth rate would be difficult to achieve, especially in the second quarter when year-on-year growth must be compared with a very high base of 12.3 percent in the second quarter of last year."

Wu said, however, it was highly unlikely the economy would contract on a quarterly basis again in the current quarter. A technical recession is determined by two straight quarters of negative growth on a quarterly basis.

"Well of course one cannot rule out the possibility but we think it's first of all very remote and it's highly improbable," Wu said.

For economic activity to shrink again in the three months to June on a quarterly basis, Wu said GDP growth would have to slow to 0.7 percent.

An indication of a potentially better second quarter came with the release later Tuesday of figures showing Singapore's non-oil domestic exportsfor April rose 6.8 percent year-on-year, up from 6.2 percent in March.

Shipments of electronics, one of Singapore's biggest industries, rose 5.6 percent to 5.6 billion Singapore dollars (3.5 billion US) in April, while non-electronic exports were 8.0 percent higher at 5.57 billion dollars.

Total trade in April was 10.4 percent higher at 51.82 billion Singapore dollars (31.6 billion US) while NODX was worth 11.17 billion dollars.

For the first quarter GDP numbers, the government said the slowdown was largely due to a sharp moderation in manufacturing, which accounts for almost a quarter of Singapore's 109-billion US dollar economy.

The manufacturing sector grew 3.1 percent compared with a year earlier in the three months to March, down from 14.1 percent in the previous quarter.

On a quarterly basis, manufacturing contracted 26.3 percent after a 25.3 percent increase in the December quarter.

The sharp decline in the manufacturing sector was caused mainly by an 18.8 percent fall in output from the biomedical industry.

All other sectors of the economy except for construction, which contracted 7.3 percent, registered an annual expansion.

Leslie Tang, an economist with UOB Kay Hian brokerage, said he was still maintaining his 2005 growth forecast of 4.5 percent as he expected GDP to grow faster in the second-half.

"I think the second-half will definitely be better because we will see a pick up in pharmaceuticals and ... a pick up in electronics. I think it could spring a surprise on the upside," Tang told AFP.

Song Seng Wun, a regional economist at G.K. Goh brokerage, revised his 2005 growth forecast down from 4.3 percent to 3.7 percent on the back of the first quarter GDP numbers but said the NODX figures were positive.

"It points to a steady start to the second quarter. It's a modest pace of growth that is likely to be sustained," Song said.

Singapore share prices fell Tuesday as the market reacted to the lower growth forecast, with the Straits Times Index down 11.11 points or 0.51 percent at 2154.37.

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