Singapore’s retail sales are expected to face challenges in the latter half of 2025, according to a report by RHB Bank’s Group Chief Economist and Head of Market Research, Barnabas Gan. The report anticipates a slowdown in retail activity due to an economic downturn, a weaker domestic labour market, and slow recovery in tourist arrivals.
In May, retail sales in Singapore rose by 1.4% year-on-year, a slight improvement from April’s revised growth of 0.2%. However, when excluding motor vehicles, sales remained flat compared to the previous year, down from a 0.8% increase in April. This data underscores the fragile state of the retail sector amidst broader economic uncertainties.
Gan’s analysis points to several factors contributing to the cautious outlook. The anticipated economic slowdown in Singapore is expected to dampen consumer spending, whilst the labour market’s weakened condition could further strain household budgets. Additionally, the recovery in tourist arrivals, a significant driver of retail sales, remains challenging.
The report serves as a critical indicator for businesses and policymakers, highlighting the need for strategic planning to navigate the anticipated downturn. As the second half of 2025 unfolds, stakeholders in the retail sector will need to adapt to these evolving economic conditions to sustain growth and stability.
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