By Nopporn Wong-Anan and Saeed Azhar

SINGAPORE, May 21 (Reuters) - Singapore saw signs on Thursday that its worst-ever recession is bottoming out after its economy shrank less than expected in the first quarter, prompting the central bank to say it is comfortable with its policy stance.

Singapore's economy shrank at an annualised and seasonally adjusted rate of 14.6 percent in the quarter, less than a Reuters median forecast for a 17 percent fall and also lower than preliminary government estimates of a 19.7 percent drop, final data showed.

The trade-dependent economy has shrunk for four consecutive quarters, but the government said if it started recovering in the second half of the year, full-year GDP could shrink 6 percent, at the high end of its forecast for a 6 to 9 percent contraction.

"It's not a pretty picture despite the revision. It's just a less dark picture," said Song Seng Wun, economist at Malaysian bank CIMB in Singapore.

Singapore's non-oil exports slipped back in April from March following two months of growth, reinforcing the view that while the worst of the downturn may be over there is no clear sight of recovery.

The Singapore dollar, the central bank's main policy tool which it manages against a secret trade-weighted basket of currencies, was little changed at 1.4578/91 against the U.S. dollar by 0115 GMT, versus 1.458 before the data.

The central bank said on Thursday the behaviour of the Singapore dollar band was consistent with its policy stance. The currency has strengthened since the bank last month shifted the midpoint of the band lower to the then-weak level of the band, a move less aggressive than some analysts had expected.

The currency's strength should be seen in the context of the U.S. dollar's broad weakness against Asian currencies, the Monetary Authority of Singapore's deputy managing director Ong Chong Tee told a briefing.

GDP in the first three months of the year fell 10.1 percent from a year earlier, also less than expected and a smaller fall than 11.5 percent reported in the earlier April data, but still the worst ever.

Since the advance figures were released, manufacturing data for January and February has been revised up, although some analysts had pointed to weakness in services.

"In short, there are some positive signs of a bottoming out. But it is not clear that we have begun to rebound from the bottom," said Ravi Menon of the ministry of trade and industry at a briefing, pointing to a slide showing green shoots and brown weeds.

Like other exporters, Singapore's economy has been hit hard by the global downturn following the slump in the U.S. housing market and credit crunch.

(Additional reporting by Kevin Lim and Candida Ng; Writing by Neil Chatterjee; Editing by Kim Coghill)