SINGAPORE, Sept 8: As Singaporeans line up at bans to save their Malaysian ringgit accounts, analysts Tuesday predicted Malaysia's controversial currency and market restrictions will cause Singapore’s economy to shrink for the first time since 1985, reports AP.

Singapore, the glittering financial hub of Southeast Asia, so far has escaped the worst of the regional crisis, mostly due to Its sound economic fundamentals.

But last week’s decisions by neighbouring Malaysia to ban overseas trading of the ringgit and stocks threatens to deal a serious blow to Singapore’s economy, which some analysts say will shrink in 1999.

"Singapore has been made very vulnerable" by Malaysia’s economic problems, said Chia Yew Boon, head of investment at Santander Investment Securities.

Malaysia is Singapore's second-largest trading partner, accounting for up to 20 per cent of Singapore's GDP.

Before last week's measures by Malaysia. Santander Investment forecast a minus 3.5 per. cent economic growth in Singapore for 1999.

Now. we have to revise that forecast to minus 5 or even minus 6 per cent. Chia said.

Chia said that Malaysia's measures "are going to affect all sectors of Singapore's economy, starting with banking and financial services, transport and communications, to export, import, retail and property market, and tourism."

Already for 1998. the government's official forecast is for the economy to grow only between 0.5 per cent and 1.5 per cent, down from 7.8 per cent growth posted in 1997. Singapore's economy last shrank in 1985. the last time the island nation fell into recession.

And while Malaysia's moves may help its economy in the short-term, analysts said they don’t deal with the underlying causes for the nation’s economic ills — and that will come back to haunt Malaysia.

In the short run. we don't deny that Malaysia's measures are going to boost their economy." Chia said. Already the measures have prompted a steady currency, lower interest rates and rising stocks. But he added: "With their very weak economic fundamentals, these measures are very dangerous."