Singapore is heavily reliant on trade

But the figures were worse than expected.

They prompted the trade and industry ministry to slash its economic growth forecast for this year down to 0.5-1.5%, from the 3.5-5.5% estimated in April.

At the start of 2001, the ministry had forecast 5-7% GDP growth.

Liberals

During Asia's 1997 economic crisis, many governments in the region raised trade barriers and increased regulation, in an attempt to slow the outflow of foreign capital.

This time, however, Singapore seems determined to accelerate liberalisation.

At the end of last month, the Monetary Authority of Singapore, the territory's central bank, unveiled the second phase of a financial deregulation plan announced two years ago.

More foreign banks will be allowed to open branches in Singapore.

And all five of Singapore's biggest banks - long protected from outside competition - are now engaged in takeover bids.

A revival of the financial sector, the government hopes, could go some way to compensate for the feeble performance of export-oriented manufacturing.