Consumer spending growth may lag at 1.8% in 2020

Spending behaviour continues to show drastic changes.

Real household spending may grow at a weaker pace at 1.8% YoY for 2020, according to Fitch Solutions, compared to the pre-COVID-19 2020 consumer spending growth outlook of 3.8% YoY and the estimated growth of 3.6% YoY in 2019.

Consumer behaviour and government measures to stem the flow of the COVID-19 infection are dramatically shifting purchasing patterns. Consumers are now placing a greater focus on essential spending categories.

“For consumers in countries where a lockdown has been initiated, and for consumers who believe that their governments might implement this measure, the spending focus is narrowing further, with a concentration on priority purchases (food and non-alcoholic drink and health spending),” Fitch Solutions stated.

In line with this, analysts are expecting Singapore’s GDP to contract by 2.8% YoY.

The government has implemented tighter measures as they extend the circuit breaker period. Shops selling packaged goods have been urged to close, whilst only those offering meals can continue operations.