'The current global financial turmoil has clouded Singapore's economic outlook. Our economy has gone into recession,' Mr Lee said at the opening of a research and development facility.

'We must expect slower growth and greater uncertainty at least over the next year.'

Singapore last week eased monetary policy for the first time in five years after advance data showed its trade-reliant economy contracted for a second consecutive quarter in the July-September period.

The city-state's economy shrank an annualised, seasonally adjusted 6.3 per cent in the third quarter, after declining 5.7 per cent in the preceding quarter.

The Southeast Asian nation last sank into a recession - defined as two consecutive quarters of economic contractions - in 2002 in a global downturn after the Sept 11, 2001 attack. -- THOMSON REUTERS