The recession-hit economy of Singapore has shrunk by a record 5.6% during July to September.

The sharp contraction was expected by analysts, and the government is now forecasting that the economy will contract by 3% for the full year.

"In the light of the uncertainty in the global economy, Singapore has now revised its full year growth forecast to minus 3.0%," said Trade Minister George Yeo.

Previously the government had forecast 0.5-1.5% growth.

US ties

The country is suffering from its exposure to the US - its biggest trading partner - which is battling with its own economic problems.

Last month's terrorist attacks on the US have also exacerbated problems by denting consumer confidence.

"The appalling attacks on September 11 and the resulting train of events have probably tipped the global economy into a recession," said Mr Yeo.

Electronics downturn

The sharp contraction in the third quarter was blamed on the downturn in the electronics sector.

The goods producing sector in the trade-driven country fell by 15% while manufacturing output fell by 21% compared with a year ago.

This constitutes the sharpest fall since the 1985 recession.

"From the data so far, it certainly describes the economy is in a far worse shape than it has ever been," said Song Seng Wun, a regional economist at GK Goh brokerage.

However, Aberdeen Asset Management's Hugh Young told the BBC's World Business Report:"The feeling on the streets is not nearly as bad or as gloomy as it was when the Asian crisis hit. Certainly there is a lot of fear over job security right through Singapore at the moment."