( CNN ) -- Singapore 's Gross Domestic Product is expected to shrink as much as 5 percent in 2009 , far more than the 1 to 2 percent contraction predicted earlier this month , the government said . People walk out for their lunch break in the financial district of Singapore on Wednesday . The Ministry of Trade and Industry said it expected a GDP reduction of between 2 and 5 percent this year . Singapore 's economy grew by 1.2 percent in 2008 , the government said , far lower than its 7.7 percent growth in 2007 . Slowdowns in manufacturing , trade , transport and storage , information and communications and the financial services sectors contributed to the decline , the government said . The global financial crisis led to a `` significant decline in fund management and stock broking activities in the second half of 2008 , '' and a sharper downturn was expected in 2009 , the ministry said . The ministry cited data on retail sales and unemployment in the United States , industrial production in Europe and on Asian exports for the weaker outlook . Inflation was expected to ease slightly , however . The finance minister is expected to deliver the 2009 budget statement on Thursday .
Gross Domestic Product reduction between 2 and 5 percent expected . Comment: Finance minister expected to deliver the 2009 budget statement Thursday .