"We expect very low growth for the next two years maybe, even three years with the possibility of recession next year," Goh said in an interview with Chilean reporters.

The interview was conducted September 11 but released only late on Wednesday, on the eve of Goh's two-day visit to Chile.

He forecast Singapore growth in 1998 would be between zero and one per cent, lower than the last official estimate of 0.5 and 1.5 per cent. In 1997, the Singapore economy grew 7.8 per cent.

"This year, the growth will be minimal, at around zero to one per cent at most, which means we have been affected by about seven percentage points in growth as a result of the crisis in the region."

Goh said nobody knew how long the crisis would last.

"If you look at the countries in the region, you can't come to a conclusion when recovery will come about,"he said.

But asked if the so-called Asian economic miracle was over, he said:

"I don't believe so. The infrastructure is there already," such as airports, roads, power stations and factories, as well as high levels of education and savings.

That set the stage for eventual recovery, he said.

"When we begin to recover, many countries will again be starting from a low base, a growth of five per cent, eight per cent is possible."

Countries in the region will also have learned valuable lessons from the crisis, such as avoiding over-borrowing, Goh said.

He said that to combat the economic slowdown at home and stay competitive with other countries, the Singapore government was focusing on costs, including measures to reduce industrial land costs, taxes, and levies and rates, and to restrain wages.

Singapore may consider a wage cut across the board, Goh said.

"We have been telling our people to exercise restraint in wage increase and we are talking about wage freeze now.

"It is possible that we are,in fact, thinking of actually a wage cut across the board for the whole economy."

While a strong currency could cost exports, Goh said Singapore "can't play around with the currency because if we do, people will lose confidence in the Singapore dollar."