This is a downward revision from its projection three months ago of 5 per cent to 7 per cent.
The new forecast comes on the heels of a 4.9 per cent growth in the first half of the year.
Prime Minister Lee Hsien Loong announced the numbers in his annual National Day message televised last night, in which he urged Singaporeans to take a longer-term view of the future even as the country navigates through an "uncertain global outlook".
Noting the challenges facing key economies Europe, the United States and Japan, he said: "The next few years will bring more rapid changes and surprises."
PM Lee's message was recorded a week ago, ahead of the carnage in the global markets late last week and yesterday as investors took a dim view of the historic downgrade of the US' credit rating plus the mounting problems in the euro zone.
Later, in response to media queries, a statement from his office said that while the outlook for the major economies has become more uncertain since the recording, it is 'premature' to revise Singapore's growth forecast further.
"The economic agencies are carefully monitoring the situation," it added.
Economists yesterday said the new forecast does not bode well for Singapore's growth in the second half of the year.
Said DBS economist Irvin Seah: "While we expected growth momentum to pick up in the second half of the year, the uplift will be weaker than earlier anticipated."
Added CIMB regional economist Song Seng Wun: "This may come from the manufacturing sector being soft, and as Singapore is an export-oriented economy, the global headwinds may translate to a slower demand, impacting segments such as financial services and trade."
PM Lee, whose message was recorded against a backdrop of towering HDB flats in Toa Payoh, maintained a cautiously upbeat tone, focusing on what needs to be done in the face of menacing clouds on the horizon.
His revised forecast engendered a sense of deja vu: In his National Day message in 2008 when the world went into recession, he had also trimmed the year's forecast by one percentage point at the top-end - from 4 per cent to 6 per cent, to 4 per cent to 5 per cent.
That year, Singapore, with exports accounting for two-thirds of the gross domestic product (GDP), became the first country in South-east Asia to slip into recession.
Yesterday, PM Lee said Singapore must respond to external events "as best as we can and steer a course that maximises Singapore's chances of success".
On the immediate front, the Government is tackling these problems: building more flats, adding MRT lines and buses, moderating the inflow of foreign workers; and reviewing the social safety net.
"The results will not arrive overnight, but we should see improvements over the next few years," he promised.
Singapore also needs to keep building for the long term: to upgrade people's skills and productivity, so as to reduce the need for foreign workers; educate the young; and build a thriving home for all.
But on the issue of foreign labour, PM Lee also warned: "We should be especially careful of one issue. While we will always put Singaporeans first, let us not turn negative on foreigners."
Singapore, he noted, has prospered because it is open to the world and alive to economic competition and change.
PM Lee also sketched a larger paradigm shift in the wake of the recent election that saw unprecedented unhappiness at the establishment: The way Singapore manages its affairs "must change".
He noted a new generation of Singaporeans want more alternative voices, and seek a bigger role in the crafting of solutions. "I welcome this," he said.
"I invite Singaporeans with ideas and plans to come forward, and help us get more things done in better ways."
He promised the Government will reach out to all segments of society "to tap your imagination, energy and initiative". "This will not only improve policies and results; it will also strengthen our sense of commitment and belonging to this place we call home."
At the same time, Singapore needs to enlarge its "common space" for a more vibrant society. But in doing so, people need to guard against magnifying "our differences and become a house divided".
He singled out the Internet generation, whose "idealism, passion and commitment will make all the difference". "We will do our utmost to help you succeed," said PM Lee, a father of four.
Singapore's forefathers pulled together with a common goal: to survive. The same must go for today's Singaporeans, he said, adding: 'We are now at a new defining moment in our history.
"In a globalised world, we can stay competitive by raising our education levels and productivity. We can pull ahead by enlarging our talent pool and remaining an open, vibrant society.
"Most importantly, we can surmount the never-ending challenges of nation building by looking out for one another and working hand-in-hand to improve all our lives."
