Singapore on Monday will announce tax cuts and increases in infrastructure spending in an attempt to counter the impact of the regional crisis, which is forcing the government to downgrade its growth forecast for this year. Deputy Prime Minister Lee Hsien Loong, in an exclusive interview with the South China Morning Post yesterday, also said it was possible the republic could start entering a recession in the third quarter. 'Our businesses are taking some considerable pain. 'There are some measures we can take to help tide them over this difficult period,' he said. 'It is not to pump-prime the economy, give people pocket money to spend or to completely neutralise the adversity, but something which will be of some assistance in a time of need.' This would be the most forthright response Singapore has made to the regional crisis so far and reflects deepening concern about the island state's economic prospects. Mr Lee declined to be specific about the measures, but said they would include 'lower levies and taxes' and 'expenditure in specific areas'. Amongst the measures that are being forecast by analysts to be announced are: a cut in public sector property rentals, a delay in increasing water tariffs and a cut in port charges, electricity tariffs and land-holding costs. Corporate tax rates could also be trimmed as a direct incentive to business. These stimulus measures will come a week after Hong Kong launched a $44 billion package to restore confidence in its battered economy. The Singapore package, to be introduced in Parliament on Monday by Finance Minister Richard Hu, Tsu Tau, will include an official downgrade of the country's growth figures for this year from 2.5-4.5 per cent. Mr Lee, who is also monetary authority chairman, said it was probable Singapore would achieve positive growth for this year as a whole. He conceded, however, that a 'technical' recession - two consecutive quarters of negative growth - might occur. 'Quarter to quarter, GDP growth can be volatile and could fulfil the technical definition of a recession, but for a year as a whole I think we will have positive growth.' The annual figure will be bolstered by robust first quarter growth of 5.6 per cent, generated by a global rise in electronics demand that now shows signs of fading. Mr Lee's comments follow remarks by Prime Minister Goh Chok Tong last Sunday warning for the first time that recession was possible. Five investment houses in Singapore have predicted negative growth for the year as a whole. Mr Lee said Singapore's future rested in its neighbours' ability to overcome adversities. 'The problems are not our creation,' he said. 'The region has run into trouble, and we have been carried along. 'Our growth has slowed down considerably. 'We have not been hit as badly as other countries in the region. But nevertheless it has been a significant impact.' He indicated that one of the overriding concerns for Singapore remained the recovery of Indonesia, which he said faced severe problems. 'The situation is quite unstable. I am not sure what will happen in Hong Kong, for example, or which way China or Japan goes, which is the broader backdrop. 'So we will have to wait and see,' he said.