The Lion City likely to see a boost in the retail sector
Industry experts maintain an optimistic outlook for the retail market, citing several factors, including Singapore’s recently announced S$1.1 billion Cost-of-Living Support Package.
“The additional cash disbursement of up to $200 in Dec 2023 for eligible Singaporeans under the Assurance Package (AP) and an extra $200 of CDC vouchers for each Singaporean household could provide incremental support to retail sales, on top of the handouts already announced in Budget 2023,” said Jester Koh, Associate Economist at UOB.
The government’s added relief brings the AP’s total to over S$10 billion.
In addition to the support package, Koh believes that “consumers may front-load some of their spending, particularly on big-ticket items like furniture, household equipment, watches, and jewellery ahead of the second tranche of GST increase from the current 8% to 9% on 1 Jan 2024,” a move that is expected to further boost retail sales.
“We continue to expect retailers to enjoy some level of domestic and external support,” Koh stated.
Furthermore, Koh pointed out other factors that can contribute to the growth of retail sales, including major events such as sports tournaments, popular concerts, BTMICE (Business Travel and Meetings, Incentive Travel, Conventions, and Exhibitions) activities, and the rise in employment coupled with resilient wage growth.
However, Koh also warned about potential downside risks to retail sales, which include a weakening external economic environment, a greater-than-expected easing in domestic and regional labour market conditions, and a slower-than-expected recovery of inbound Chinese tourists.
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