Singapore likely slipped into recession in the three months to December, analysts told AFP on Monday, as data showed growth in 2012 came in lower than expected.
In his New Year's message, Prime Minister Lee Hsien Loong said "growth was slower this year, at 1.2 percent", which is well off the official growth forecast of 1.5-2.5 percent.
However, CIMB Research economist Song Seng Wun said the figures for the year indicate the economy shrank 3.5 to 4.0 percent quarter on quarter in October-December, which followed a contraction of 5.9 percent in the previous three months.
Two consecutive quarters of contraction point to a technical recession.
"It's basically just the magnitude of (the recession) rather than if," he told AFP.
And Jason Hughes, head of premium client management for IG Markets Singapore, said: "It would seem that the PM's statement of 1.2 percent growth for 2012 would suggest that we've contracted in the fourth quarter which would put us in technical recession territory."
An official breakdown of the data will be released by the trade ministry on Wednesday.
Lee said growth had been hit by weakness in the city-state's key export markets of Europe, which is battling a debt crisis, and the United States and Japan, where economic recovery is sputtering.
"The weak US, European and Japanese economies dampened our growth, but some industries have also had difficulty hiring the workers they need to grow. Next year we expect to grow by 1.0-3.0 percent," he added.
Singapore, widely regarded as a bellwether for Asia's export-driven economies, went through its worst-ever recession during the global financial crisis from the third quarter of 2008 to the second half of 2009.
Unlike its bigger neighbours, however, Singapore is more vulnerable to external trade developments because it has a small domestic base of just over five million residents.