(CNN) -- In a further indication of the weakening Asian economy, Singapore on Friday said GDP had declined by 12.5 percent in real terms in the fourth quarter of 2008 and revised downwards its growth estimates for 2009.
Blaming the global economic crisis, Singapore's Ministry of Trade and Industry (MTI) warned that the island state's economy would grow no more than 1 percent and could shrink by up to 2 percent in 2009. In November it predicted growth of -1 percent to 2 percent.
"Since November, analysts have shaded down their growth forecast for the US, Europe and Japan by about one percentage point," the ministry said in a statement.
"The growth outlook for the regional economies has also deteriorated, with more economies now expected to register negative or flat growth next year."
In 2008, Singapore's economy grew by an estimated 1.5 percent, falling short of forecasts of 2.5 percent and well down on 2007's 7.7 percent growth.
The ministry said manufacturing would be weighed down by falling demand in developed economies and predicted a sharp slowdown in financial services caused by weak financial markets and credit growth.
All sectors of Singapore's economy dependent on the movement of goods and services in the region would be affected it said.