Just a couple of months ago, there was still a fair dose of optimism among economic commentators.

Sure, there were some worrying rumours that retailers were seeing sharply lower sales and the quiet property market hadn't picked up much. But the economy had just clocked robust 6.7 per cent growth in the first quarter and there were upbeat analyst reports floating around saying the subprime crisis might finally be behind us. Besides, people were genuinely looking forward to the buzz of the coming Beijing Olympics and the Formula One race in Singapore.

Well, the Beijing Olympics Games are now upon us and the F1 race is just six weeks away, but there's not much cheer going around.

My conversations with economist friends these days seem to centre around how low GDP growth can go.

The first signs of trouble were shockingly bad manufacturing output figures, followed by shockingly bad export figures. Not surprisingly, flash estimates showed that GDP growth had slowed to just 1.9 per cent in the second quarter.

A lot of the blame was placed on the volatile pharmaceuticals industry where apparently, some of the biggest plants - including GlaxoSmithKline's - can stopped production or were producing "intermediate goods" not counted as finished goods. Economists think pharmaceutical numbers will come back to life again in the next two quarters, but these days any overt optimism about a strong rebound in the second half just seems a little misplaced.

Why?

Because the global economy is slowing fast, with the subprime problems in the US and Europe dampening consumer confidence more day after day. Even China's central bank has started to worry about slowing growth and is putting off earlier anticipated interest rate hikes.

At home, sectors like financial services and tourism will be hit in event of a global slowdown, and construction is slowing as high materials prices force builders to defer or scale back projects

Everyone's keeping their fingers crossed, of course. In these uncertain times, anything can happen and sentiment could turn upbeat again.

In the meantime, it's time to scale back those expectations. After four great years of growth (averaging 8 per cent per year), it's time to sober up a little and prepare for some turbulence.