Singapore economic outlook grim for 2009

Singapore's economy is likely to worsen next year after growing just 1.5 percent in 2008, Prime Minister Lee Hsien Loong said Wednesday, urging Singaporeans to "prepare for a difficult year ahead."

"Our economy will probably contract further. More companies will be forced to downsize. So far we have not seen many job losses, but I expect more retrenchments in the next few months. We must be psychologically prepared," Lee said in his New Year's Day message to the nation. More job losses are expected in the next few months as companies are forced to shed employees, Lee said.

"As a small, open economy, Singapore cannot avoid being hit.

We earn our living by trading with and servicing the world. So the fall in worldwide demand has hit our exports, our tourism sector, and our broader economy," he said.

"We must therefore prepare for a difficult year ahead, and especially the first half of 2009.

SINGAPORE, AFP