Expert warns of constrained retail growth as tourism receipts normalise

Retail sales remained weak in July, with a modest 1.0% YoY rise.

Singapore’s retail growth may face constraints from normalising tourism receipts and rising overseas spending by residents amid a strong SGD, an expert warned.

UOB Associate Economist Jester Koh also warned that Singapore’s tourism competitiveness could be hindered by higher price levels compared to other ASEAN economies, alongside the impact of the strong S$NEER-based monetary policy aimed at controlling inflation.

Koh added that Chinese tourists are increasingly favouring domestic travel over overseas trips.

Singapore, however, could capitalise on major events such as sports, popular concerts and BTMICE ( Business Travel and Meetings, Incentives, Conventions and Exhibitions) to boost retail growth.

In September, Singapore will also host the Formula 1 Singapore Grand Prix 2024, which Koh said will provide some support to retail sales.

The disbursement of cash handouts under Budget 2024, including the Cost-of-Living Special Payment in September and the Assurance Package in December, could further support retail growth, said Koh.

Retail sales remained weak in July, with a modest 1.0% year-on-year rise, falling short of expectations.

The sales in July would also have contracted by 2.3% YoY if not for the significant rise in motor vehicle sales, which surged by 27.2% YoY.