Singapore’s economy grew at a slower rate than expected in the third quarter, indicating that the country’s economic condition continues to falter.

According to the data released Friday by Statistics Singapore, the country’s gross domestic product (GDP), which measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy, rose 0.3 percent in the third quarter compared to the same period last year, down from 2.5 percent in the second quarter and below the analysts’ expectation of 0.9 percent.

“With meaningful recovery in the global economy still some way off, we expect next year to be another sub-par one for Singapore. We retain our view that the central bank will loosen policy at its next meeting in April,” Capital Economics said in a note.

The continuing debt crisis in Europe and the weakening global economic condition have also hurt the demand for exports, the key driver of Singapore's economy. Exports contracted by 2.3 percent in the third quarter, compared with the 2.2 percent growth in the second quarter. The fading hopes of China’s economy to rebound fast and also a quick recovery of the U.S. economic condition are adding to the problems for Singapore.

Following the release of this economic data, the Ministry of Trade and Industry said that it now expects the GDP growth for the full year to come in at around 1.5 percent, at the lower end of its previous forecast range of 1.5-2.5 percent.

There seems to be less support from Singapore's domestic economy with the real wage growth turning negative and inflation remaining high.

Market participants expect that the Monetary Authority of Singapore (MAS) will loosen the monetary policy to revive the economy and rejuvenate growth momentum. Investors expect that the MAS at its next policy meeting in April will reduce its policy band for the nominal effective exchange rate. However, the presence of high inflation could stop the central bank from such a policy measure.