Singapore’s retail sales in August experienced a downturn, primarily driven by a slump in motor vehicle sales, according to Zavier Wong, Market Analyst at etoro. The Certificate of Entitlement (COE) premiums, nearing their July record of S$129,000, have deterred potential buyers, contributing to the decline. The limited quota increase of just 0.2% from the previous quarter left little room for premium reductions, prompting buyers to delay purchases in anticipation of cheaper bidding rounds.
Beyond vehicles, retail sales excluding vehicles grew by only 1.6%, falling short of the 2% median forecast from economists surveyed by Bloomberg. Wong highlighted that the mid-August spike in oil prices, triggered by fears of a collapsing Hormuz ceasefire, has influenced consumer behaviour. The heightened awareness of Middle Eastern tensions has led households to anticipate price hikes, resulting in reduced discretionary spending. This shift is evident in the sharp year-on-year declines observed in cafés and food courts.
Conversely, cosmetics and electronics sectors showed resilience, posting double-digit growth for the second time in 2026. Wong noted that these categories have consistently performed well throughout the year, independent of broader economic fluctuations.
Looking ahead, the upcoming Monetary Policy Statement from the Monetary Authority of Singapore (MAS) is expected to address the ongoing oil price volatility. Wong anticipates that if oil prices continue to rise, MAS may adopt a hawkish stance, favouring early intervention over delayed, larger adjustments. This approach aligns with the central bank’s strategy throughout the year.
