SINGAPORE is 'very concerned' that the growth in visitor arrivals is slowing and is keeping a close watch on how it may affect the government's target for travellers to the island-state this year, said Singapore Tourism Board (STB) chief Lim Neo Chian.

Growth in visitor arrivals eased to 0.8 per cent in April and May, the slowest expansion in a year, according to STB data.

Visitors from Indonesia, Singapore's biggest visitor-generating nation, fell 12 per cent in May, the steepest decline among the city's largest markets.

'The overall general environment is obviously very challenging in many of our key markets. We're very concerned and monitoring very carefully.'

The Bloomberg report said Singapore may have fewer visitors than expected as inflation and a weaker global economic outlook curb travel plans.

This may put at risk the city-state's target for tourist arrivals to increase 5 per cent to 10.8 million this year.

The city also expects the number of visitors to rise to 17 million by 2015 with new attractions including two casino-resorts.

'It's a little bit too rushed and too quick to change our target,' Mr Lim said. 'It depends how big a drop' the Singapore tourism industry will face.

Asian policy makers are predicting expansion this year will be at the lower end of their targets or are cutting growth forecasts as they increase estimates for inflation.

Singapore's economy expanded at the slowest pace in five years in the second quarter as a 26-year high inflation constrained spending.