Singapore’s retail sales saw a 1.4% year-on-year increase in May 2025, primarily driven by a significant 10.4% rise in motor vehicle sales, according to Market Analyst Zavier Wong from eToro. This surge followed a temporary increase in the Certificate of Entitlement (COE) quota. However, Wong warns that the core retail volumes, excluding autos, have been quietly declining since March.
The latest data, expected today, is likely to reveal this underlying softness more clearly. The Monetary Authority of Singapore (MAS) has highlighted potential softening in labour demand, which could further impact household sentiment in the latter half of the year. Wong notes that whilst consumers continue to spend, they are doing so with more caution, prioritising essential goods over non-essential, mid-range lifestyle purchases.
Regional platforms such as Sea Ltd. and Grab Holdings are useful indicators of consumer behaviour shifts. Wong points out that if growth on platforms like Shopee and Grab starts to plateau, it could signal broader caution across the region, affecting not just e-commerce but also dining, mobility, and lifestyle services.
Looking forward, discretionary spending categories may face increased pressure, particularly if the labour market weakens. The MAS has already indicated this risk, citing potential moderation in hiring and wages. The upcoming labour market report, due in mid-September, will be crucial in determining whether consumers are becoming more cautious due to weaker income expectations.
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