ECONOMIC growth for Singapore this year could be weaker than forecast, as the trade-dependent country suffers from a slowdown in the global economy.

Minister for Trade and Industry Lim Hng Kiang said yesterday that growth for this year will be slightly below the earlier projections of 2.5 per cent, as there has been an unprecedented drop in world market conditions since September.

'The economy is very volatile and very vulnerable to global conditions... We are looking at a very difficult trade environment,' Mr Lim told reporters on the sidelines of an Asean trade meeting.

The Government has cut growth forecasts several times this year as the financial crisis hurt demand for its exports from its biggest customers in recession- hit United States and Europe, as well as emerging markets.

The country's non-oil domestic exports, which accounted for about 70 per cent of its economy last year, fell sharply in October.

The Government has pledged to spend $2.3 billion to help firms get credit, and said it would run a larger budget deficit to support an economy that it said could shrink 1 per centnext year, and at best would expand 2 per cent.

Some parts of the economy will withstand the crisis and support growth, Mr Lim said, citing committed company investments and new factories that will start production next year, news agency Bloomberg reported.

In addition, the country's monetary-policy stance is conducive to growth, said Mr Lim.

The Monetary Authority of Singapore in October ended a policy favouring gains in its currency in an effort to support the economy as inflation eased from a 26-year high.

Singapore fell into a recession in the third quarter and is poised to emerge as Asia's worst-performing economy next year, with an expected GDP contraction of 1.1 per cent, a recent Reuters poll showed.

The World Bank predicted last week that international trade will shrink next year for the first time in more than 25 years.