Singapore’s retail sales rose 4.0% y/y, higher than Bloomberg’s consensus of 0.9% y/y and Jul’s revised reading of 1.3% y/y. On a seasonally adjusted sequential basis, retail sales rose 1.7% m/m in Aug, the second consecutive month of expansion recorded (Jul: +0.8% m/m). Excluding motor vehicle sales, retail sales increased 1.9% m/m (Jul: -0.9% m/m), translating to a y/y print of 3.7% in Aug (Jul: +0.6%). In nominal terms, the value of retail sales rose to SGD4.01bn (from SGD3.95bn in Jul).    

Outlook – We continue to expect retailers to enjoy some level of domestic and external support, complemented by major events such as various sports, popular concerts and BTMICE (Business Travel and Meetings, Incentive Travel, Conventions and Exhibitions) activities. The labour market remains tight by historical standards while still rising employment and resilient wage growth could keep domestic consumption demand supported in the near term. On 28 Sep 2023, the government announced a SGD1.1bn Cost-of-Living Support Package (link), with a concurrent SGD0.8bn top-up to the Assurance Package (AP) bringing the total allocation under the AP to over SGD10bn. The additional cash disbursement of up to SGD200 in Dec 2023 for eligible Singaporeans under the AP and extra SGD200 of CDC vouchers for each Singaporean household (to be issued in Jan 2024) could provide incremental support to retail sales, on top of the handouts already announced in Budget 2023. In addition, consumers may front-load some of their spending (in particular, 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.