Consumer confidence climbs in May on back of lower costs, tax rebates

Confidence recovery is gaining traction.

Singapore consumer confidence reached 129.7 points in May, ANZ-Roy Morgan's Consumer Confidence Index showed.

This is 4 points above the April reading and is now clearly above its long-term average of 122.2.

"Over the past month, developments such as a further reduction in electricity tariffs and a fall in holiday travel costs (with the removal of airline fuel surcharges), a one-year road tax rebate and a reduction in the concessionary foreign domestic helper levy are all likely to have boosted sentiment on disposable income. Certainly when coupled with falling fuel prices, this could be quite a supportive dynamic for consumption," said Glenn Maguire, ANZ Chief Economist South Asia, ASEAN & Pacific.

Maguire noted that the steady increase in consumer confidence in recent months suggests that consumer confidence recovery may be gaining traction from its low in early 2014.

"The strongest indication that consumer confidence is moving to a firmer footing is that the number of respondents expressing confidence on the 12-month and 5-year outlook has now moved above the 50% mark," he said.