Singapore announced a shock loosening of monetary policy Thursday to kickstart the stuttering economy, as it forecast a slower growth outlook this year and analysts warned of a possible recession.

The city-state’s central bank joined several others around the world in announcing easing measures as they battle sluggish global demand — particularly from key market China — and a weak outlook.

Singapore uses currency policy rather than interest rates as a tool to tweak the island’s economy. It manages the dollar against an undisclosed basket of currencies of its major trading partners and competitors.

The MAS said in a statement: “The Singapore economy is projected to expand at a more modest pace in 2016 than envisaged in the October policy review.”

However, the announcement sent the local currency tumbling 0.9 percent against the US dollar, dragging other regional units along with it on fears it will lead to similar moves in regional emerging economies protect their exports.

Thursday’s announcement came as the government released data showing economic growth was flat quarter-on-quarter in January-March, which was sharply down from the 6.2 percent seen in the previous three months.

The government has said it expects the economy to expand 1.0-3.0 percent this year, but private sector economists have forecast it to come it at the lower end of the range. The economy grew 2.0 percent in 2015.

Going forward, growth outlook in the next 6-9 months will remain weak. Our GDP growth forecast for the full year remains at 1.5 percent, which essentially implies at least one quarter of contraction,” he said in a note. In fact, we maintain the view that risk of a technical recession (two successive quarters of contraction) should not be discounted.”