Cost-of-Living support package to boost retail sales

For 2023, UOB expects retail sales to grow by 3.5% 

Experts remain positive on the outlook of the retail market, citing many upside risks, including Singapore’s $1.1b 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,” Jester Koh, UOB associate economist, said. 

The additional relief from the government brought the AP to over $10b.

Apart from the relief package, Koh believes “consumers may front-load some of their spendings, 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,” which, in turn, will boost retail sales.

“We continue to expect retailers to enjoy some level of domestic and external support,” Koh said. 

Other factors that can boost retail sales include major events such as various sports, popular concerts and BTMICE (Business Travel and Meetings, Incentive Travel, Conventions and Exhibitions) activities and rising employment and resilient wage growth.

Koh, however, warned of downside risks to retail sales which include a weakening external environment, greater-than-anticipated easing in domestic/regional labour market conditions, and a slower-than-expected recovery of inbound Chinese tourists.