Finance Minister Richard Hu Tsu Tau says he remains hopeful Singapore's economy will resist recessionary pressures and continue to grow this year. 'The economy is fairly well diversified, we are unlikely to slip into negative growth this year as growth will be supported by relatively healthy performances in the US and EU [European Union] economies,' he said yesterday. Mr Hu's assertion comes in the wake of figures from Hong Kong last week which showed gross domestic product shrank 2 per cent in the first quarter, its first contraction in 13 years. He did not downgrade Singapore's official economic growth forecast yesterday, but the government is widely expected to do so soon. He said the impact of the Asian crisis, including the growth prospects of neighbouring countries, had been factored into the official forecast of 2.5 to 4.5 per cent. Mr Hu's belief that Singapore could avoid the impact of troubles facing Malaysia and Indonesia - two of its biggest trading partners - is seen as overly optimistic by many economists. But Mr Hu said as regional developments had yet to stabilise, nobody could be sure of the full impact on Singapore. 'The effects of the financial turmoil and developments in Indonesia have yet to be fully played out,' he said. Mr Hu said preliminary data showed non-oil domestic exports last month fell by 6 per cent from a year ago, against a drop of 1.6 per cent in April. He said: 'Growth in the second quarter is expected to moderate further as the impact from the regional financial turmoil filters through the economy. 'We will soon know how sharply the second-quarter GDP growth has declined. We will then decide if we should proceed with additional measures to help the economy.' Singapore recorded a year-on-year growth rate of 5.6 per cent in the first quarter, against full-year growth of 7.8 per cent last year. Indonesia, by far the worst hit, is expected to contract by at least 10 per cent this year. Malaysia said at the weekend its economy contracted 1.8 per cent in the first quarter of this year, putting it on course for recession. Thailand and South Korea are also likely to suffer recessions this year, and the region's expected export-led recovery is showing little sign of taking off. The pace and depth of the Southeast Asia's economic slowdown has been harsher than had been expected, causing Singapore additional troubles. In the past week, two broking houses have forecast minus 0.3 per cent growth for Singapore this year. Numerous others are downgrading their forecasts, but say they remain in positive territory. Deputy Prime Minister Tony Tan hinted last week that some off-budget measures could be expected by the end of next month if second-quarter growth figures indicated a further slowdown. There have been hopes that measures might be taken to prop up the property market. But National Development Minister Lim Hng Kiang yesterday ruled this out, saying the government was prepared to let weak developers go insolvent. Mr Lim told Parliament: 'Weak property sales will affect the bottom line of developers and we cannot rule out the possibility that some could become insolvent, as in any other business.'