Singapore’s retail sector experienced a 2.3% month-on-month decline in May, according to UOB Global Economics and Markets Research. This downturn, following a 0.4% increase in April, highlights consumer caution, especially in purchasing pricier goods. The drop was evident across nine out of 14 retail subcategories, with significant decreases in wearing apparel and footwear, motor vehicles, and food and alcohol.
Despite the overall decline, some categories bucked the trend. Sales of recreational goods surged by 11.6% ahead of the school holidays, whilst furniture and household equipment, optical goods and books, and computer and telecommunications equipment saw moderate increases. Year-on-year, retail sales still grew by 3.0% in May, albeit slower than the 5.4% growth in April.
Looking ahead, retail sales are expected to maintain positive growth throughout 2026. Concerns over consumer sentiment and discretionary spending, previously affected by high energy and transportation costs, are easing. This is partly due to the anticipated reduction in Middle East conflict intensity and the resumption of energy flows through the Strait of Hormuz. Government initiatives, such as the latest tranche of CDC vouchers, are also expected to bolster domestic spending.
UOB has revised Singapore’s 2026 GDP growth forecast upwards to 4% from 3.2%, reflecting improved economic prospects. However, external uncertainties may continue to restrain non-essential spending.
