Singapore’s retail sales have shown a lacklustre performance in the first half of 2025, according to a report by UOB Global Economics and Markets Research. The overall sales grew by just 1.2% year-on-year, a slight dip from 1.4% in 2024 and 2.3% in 2023. The tepid growth is attributed to a sluggish recovery in tourist arrivals, which remain below pre-pandemic levels, particularly from China.
In June, retail sales declined by 1.2% month-on-month, seasonally adjusted, despite a year-on-year increase of 2.3%, largely due to low base effects. Specific sectors such as computers and telecommunications equipment, mini-marts and convenience stores, and food and alcohol experienced consecutive monthly contractions. However, motor vehicle sales provided a boost, with a significant 14.6% year-on-year increase in June.
The report highlights that the diversion of resident spending abroad during the June school holidays, coupled with a strong Singapore dollar, has further impacted retail sales. Outbound air departures of Singapore residents have exceeded 2019 levels, indicating a shift in spending patterns.
Looking ahead, retail sales are expected to remain subdued for the remainder of 2025, as the labour market shows signs of cooling. The Ministry of Manpower’s advance release for Q2 2025 indicated a slight dip in firms’ hiring plans and intentions to raise wages for Q3 2025, which could slow wage growth and dampen discretionary spending. Nonetheless, initiatives like the SG60 vouchers and upcoming events such as the Formula 1 Singapore Grand Prix may offer some support to retail activity.
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