World's 2nd richest country posts slowest retail sales growth in 6 months

Singapore's economy showed signs of sluggish retail sales growth in July, marking the country's slowest expansion in six months. According to data from the Singapore Department of Statistics, total retail sales increased by 4% year-on-year in June, but fell short of the 3.1% median estimate from economists. On a month-over-month basis, retail sales grew by 0.9% in July.

Excluding motor vehicles and related parts, retail sales rose by 1.5% from a year earlier and 0.7% from the previous month. Total retail sales were valued at S$4.4 billion (US$3.47 billion) in July, with online transactions accounting for 15.4% of the figure, a slight decrease from the 16.4% recorded in June. The best-performing retail categories in July were recreational goods, up 13.9% year-on-year, watches and jewelry, up 11.1%, and computers and telecommunications equipment, up 5.1%.

However, food and alcohol sales declined by 5.1%, while department store sales fell by 3.5%. The slower year-on-year growth may not necessarily indicate a broad-based spending pullback in Singapore, as the city-state remains the world's second richest country by GDP per capita. Retail experts suggest that the month-on-month increase indicates sustained spending momentum, but spending patterns are becoming more uneven.

Strong growth in recreational goods, watches, and jewelry sales suggests that Singaporeans are still willing to spend on discretionary items, while declines in categories such as supermarkets, mini-marts, and food and alcohol may reflect a high base from the previous year when SG60 vouchers were distributed. Despite a 1.9% year-on-year decline in F&B services sales, the sector still saw increases in fast food outlets and food caterers.

The city-state's F&B sector has faced closures of heritage hawker stalls and popular restaurants and cafes, but openings have outpaced closures.