Lee said at a conference of the ruling People's Action Party that Singapore's growth rate used to be 7 to 8 percent per year, and 5 percent on average over the last decade, reported Xinhua.
"Now, if you can do 3 to 4 percent, I think that's good.
As our workforce grows more slowly in future, even 2 to 3 percent will be considered good growth," Lee said.
Singapore is now one of the world's richest countries in terms of per capita gross domestic product, compared to its status of a third-world city state only half a century ago.
Nevertheless, Lee, who is also the secretary-general of the ruling party, said that growth remains important and that those who feel that the government over-emphasises growth do not appreciate how a lack of growth would inevitably impact the country. A sustained period of low or zero growth would invariably affect Singapore's vibrancy, its business sector and its own confidence and the low-wage workers would be likely to be the hardest hit.
"Do we need growth? Yes we do, because we want to generate resources, we want to improve lives and build a liveable city," Lee said.
Lee reiterated that Singapore needed to keep the important values that have made the country successful, including meritocracy.
"If we do not recognize merit, how do people from poor backgrounds rise, improve their lives, and contribute fully to Singapore? Nobody will ever discover them," he said.
He also said Singapore changed its phrasing of the growth target recently to "about 1.5 percent" because the government is not confident that it can hit 1.5 percent.
"It may well be lower, so I would say it is wise for us to expect (the final number) to be lower than 1.5 percent," he said.