Singapore: Retail Sales surprised to the downside in January – UOB

Senior Economist at UOB Group Alvin Liew reviews the latest release of Retail Sales in Singapore.

Key Takeaways

“Singapore’s retail sales started the new year on a cautious note, contracting by -9.4% m/m, -0.8% y/y in Jan following Dec’s high of 7.7% y/y (versus prelim est of 1.3% m/m, 7.4%. Excluding motor vehicle sales, the sequential decrease was smaller but still notable at -8.2% m/m, and it translated to +2.1% y/y increase (from +1.0% m/m, 9.5% y/y in Dec).”

“Outlook – We continue to expect domestic retailers to enjoy domestic and external supports, complemented by the return of major events such as various sports, concerts and BTMICE (Business Travel and Meetings, Incentive Travel, Conventions and Exhibitions) activities attracting tourist arrivals, while the tight domestic labour market will likely contribute further to domestic consumption demand. One of the key downside risks to retail sales in 2023 is the still-elevated inflation pressures that may increasingly curb discretionary spending of households, in addition to the 1ppt GST hike. The low base effect is also likely to fade going into the new year, rendering less uplift.”