The support package came as the government said its economy could contract in 2009 after weaker than expected third-quarter GDP figures.

The city-state’s economy, already in recession, was now expected to grow by about 2.5 percent this year, down from about three percent previously forecast, the Ministry of Trade and Industry (MTI) said.

Next year, it saw GDP ranging between a contraction of 1.0 percent and growth of 2.0 percent.

The ministry said gross domestic product (GDP) fell by an annualized 6.8 percent in the third quarter ended in September, after a fall of 5.3 percent in the second quarter.

The figures were worse than expected.

“Singapore may see its worst recession ever,” said CIMB-GK regional economist Song Seng Wun. He predicted GDP could shrink two to five percent annually over the next couple of years.

Preliminary government data released last month, when trade-dependent Singapore became the first Asian economy to fall into recession, showed that real GDP declined by 6.3 percent in the third quarter after contracting 5.7 percent in the previous three months.

GDP is the value of all goods and services produced by an economy.

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