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SINGAPORE, Dec 31 (Reuters) – Singapore’s economy, which is set for its worst contraction this year due to the COVID-19 pandemic, is seeing signs of stabilisation, its prime minister said on Thursday.

“After our most severe downturn since independence, we look forward to a rebound in 2021, although the recovery will be uneven, and activity is likely to remain below pre-COVID-19 levels for some time,” Lee Hsien Loong said in a New Year message.

Singapore’s economy is likely to contract between 6% and 6.5% this year, marking its worst recession, and grow 4% to 6% in 2021, according to official forecasts.

“Economically, we are not yet out of the woods either, but we are beginning to see signs of stabilisation,” Lee said. (Reporting by Aradhana Aravindan; Editing by Martin Petty)