"Despite oil prices more than doubling since end-2003, the economic impact on Singapore has so far been relatively muted," Lim told parliament.

"With continuing economic growth, employment should register further gains in the near term."

Lim also said the impact of high oil prices on inflation has so far been limited.

While the costs of fuel and utilities rose 10.6 percent between December 2003 and July this year, prices of other consumer items have shown much smaller increases or have even declined, he said.

Earlier this month, private-sector economists raised their median 2005 growth forecast for Singapore to 4.4 percent but warned that oil prices, a technology downturn and a US slowdown were seen as key risks.

Oil prices have fallen sharply since hitting an all-time high of 70.85 on August 30 after Hurricane Katrina swept through the heartland of US oil refinery operations in the southern United States.

New York's main contract, light sweet crude for delivery in October, was trading below 64 dollars a barrel in Asian trade Monday but analysts said prices could spike again ahead of the northern hemisphere winter.

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