RHB: Singapore retail sales growth expected to slow down in H2 2025 amid economic headwinds

SINGAPORE: Singapore’s retail sector is expected to stay resilient in the first half of the year, but sales growth is expected to slow down in the second half (H2) amid economic headwinds, Singapore Business Review reported, citing RHB Bank’s new report.

Retail sales in March went up by 1.1% from a year ago, bouncing back from a 3.5% drop in February. Online sales, which saw the highest share of all sales since November 2024 at 13.4%, jumped 11.9% year-on-year (YoY).

RHB economists pointed to government support measures, tourism-driven events, and strong online commerce as the three key factors that could keep retail sales steady in the near term.

In mid-April, it was announced that Singaporean households will receive S$500 of Community Development Council (CDC) vouchers from May 13 and another S$300 in January 2026.

The report also anticipated the series of international events in the city-state, including Lady Gaga’s concert, to give tourism a boost — benefiting sectors such as hospitality, transport, and retail.

However, it noted that the city-state’s retail sector will likely be impacted by the year’s soft labour market and gradual economic slowdown, with employment growth expected to weaken, especially in trade-related sectors like manufacturing and wholesale.

“Rising trade tensions could increase economic uncertainty, dampening global business investment and consumer spending,” the report stated. It added that sluggish growth forecasts in the US and China are expected to put pressure on trade-dependent Singapore.

Callam Pickering, APAC senior economist at Indeed, recently warned that geopolitical and economic uncertainty may weigh upon the city-state’s economy over the remainder of the year, impacting job creation.

Amid these pressures, RHB cut Singapore’s 2025 gross domestic product (GDP) growth forecast to 2.0%, warning it could fall further to between 0.5% and 1.0%.

Although sales rose in supermarkets (3.4%), furniture (2.5%), and recreational goods (3.2%), other categories continued to drop — apparel fell 8.0%, petrol services declined 8.2%, and motor vehicle sales slowed to 3.3% YoY from 20.0% the month before.

The report said retail demand will likely slow as GDP growth eases, urging caution for the months ahead. /TISG 

Read also: Singapore’s F&B sector continues decline in March, sales down to S$960M

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