Lee Hsien Loong says Singapore's economy will grow by only around 2.5 percent this year.
He spoke to reporters after meeting Chilean President Michelle Bachelet on Wednesday.
Lee says Singapore is affected by the crisis because it has an open economy and income from tourism and exports is falling.
But he says the government is working to lessen the effects of the crisis, including giving credits to industries and helping them reduce costs.
Chile and Singapore have a free trade accord and Lee and Bachelet signed an agreement for educational cooperation.