Singapore is heavily reliant on trade

The current programme is worth 7% of GDP, Mr Lee said, and would push the state budget temporarily into the red.

The main focus of the plan is a drastic programme of tax cuts, including rebates on personal and corporate taxes, and a range of incentives for business.

Mr Lee also announced an expansion of the "Singapore Share" scheme, under which citizens are urged to buy quasi-government-bonds as a means of encouraging saving and investment.

In addition, the package included curbs on speculation in property, effectively banning the sale of residential and commercial land sites for the whole of next year.

A property bubble was one of the main factors behind the Asian economic crisis of 1997-98.

Faint praise

Analysts have broadly welcomed the package, saying it should help trim the worst of the economic falls in the fourth quarter of the year.

"The timing is good when the economy is right at its weakest point," said Paul Schymyck, an economist at Ideaglobal.com.

But some took issue with the property measures.

"In a way, it's long overdue," said Rajeev Malik, economist at JP Morgan.

"Who's going to speculate on property at this point?"

And others pointed out that while domestic demand may well be stimulated, that will not do much to help the wider economy, which is at the mercy of global demand, especially for hi-tech goods.