Singapore’s manufacturing sank down 38 per cent, which caused economy to shrink a bigger-than-expected 6.8 per cent in the fourth quarter.

Singapore’s GDP contracted 2.1% in 2009, but Singapore Prime Minister Lee Hsien Loong reiterated the government's 2010 GDP growth forecast of between 3% and 5%.

He also added that while other economies like U. S., Japan and Europe are still emerging from recession, Singapore's economy is all set to see a boom.

The trade, finance and tourism sector managed to push the country's economy, and it has bounced back from a 12-month recession by surging the last two quarters, growing 22 per cent in the second quarter and a revised 14.9 per cent in the third.

Not everyone, however, is very confident. "Until we see the private sector ready to take over as the engine of growth, it's probably a bit premature to celebrate”, said Song Seng Wun, an economist at CIMB in Singapore.