Singapore government maintained its growth forecast of between 1 and 3 percent for the economy in 2012, the Ministry of Trade and Industry said on Thursday.
It said the strength of the recovery in the United States will be restrained by public spending cuts and continued weakness in the housing market, though it has shown signs of pick-up, particularly in employment and consumer spending.
The eurozone is expected to enter into a recession as fiscal consolidation and bank deleveraging dampen private demand, while the major Asian economies are also likely to see slower growth, the ministry said.
"Singapore's external-oriented sectors will face a challenging environment ahead," it said.
The growth forecast did not factor in the external downside risks such as the sovereign default in the eurozone and the escalation of geopolitical tension in the Middle East, it added.
The ministry also released statistics showing that the economy grew by 4.9 percent in 2011, following the expansion of 14.8 percent in 2010.
The growth of 4.9 percent is higher than the previous released flash estimate of 4.8 percent./.