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SINGAPORE, Jan 30, 2009 (AFP) - Companies in Singapore laid off 7,000 workers in the last three months of 2008, as the economy slipped deeper into recession, the government said Friday.

More than half of the layoffs were in the key manufacturing sector, which has been hit by a sharp decline in demand for the city-state's exports, the Ministry of Manpower said in a statement citing preliminary estimates.

The seasonally adjusted unemployment rate rose to 2.6 percent in December, up from 2.2 percent in September and 1.7 percent in December 2007, it said.

The 7,000 workers laid off in the December quarter compared with 2,346 employees who lost their jobs in the preceding three months and 1,966 for the same period in 2007, the ministry said.

For the whole of 2008, there were 13,400 workers laid off, up from 7,675 the year before.

Employment also slowed significantly to 26,900 in the fourth quarter of last year, from 55,700 people who were hired in the preceding quarter and 62,500 in the same period in 2007.

Finance Minister Tharman Shanmugaratnam warned last week the country is facing its worst recession since independence 44 years ago and announced a record stimulus package of more than 13 billion US dollars.

Singapore in October became the first Asian economy to enter recession, falling victim to a global slowdown sparked by a crisis in the US housing market.

Source: CNA