Singapore’s retail sales unexpectedly declined for the first time in seven months in February as inflation at the highest in 26 years sapped consumer confidence and spending.
The retail sales index fell 1.3 percent from a year earlier, after climbing a revised 8.2 percent in January, the Statistics Department said today. That was below the median forecast of a 4.2 percent increase in a Bloomberg News survey of 11 economists. Excluding vehicles, sales gained 2.9 percent.
Singapore’s consumer prices are climbing at the fastest pace since 1982, spurred by rising food and energy costs. The government is distributing cash and food vouchers to its citizens as part of fiscal measures to boost the $132 billion Southeast Asian economy and ease the burden of rising prices.
“You have a number of government subsidies coming through in the next couple of months,” said Philip McNicholas, an economist at IDEAglobal in Singapore. “Given the way inflation is going, they are more likely to spend it.”
Singapore is handing out S$4 million ($3 million) in vouchers for food and services including childcare to lower- income workers, the Straits Times reported April 11, citing National Trade Union Congress Secretary-General Lim Swee Say.
Adjusted for seasonal factors, retail sales in February rose 8.8 percent from January. Excluding cars, the index climbed 4.8 percent, the government said.
Vehicle sales in February fell 10.6 percent from the same month in 2007. From January, auto sales dropped 30 percent.
Record oil prices are increasing fuel and transport costs for consumers. The Singapore government doesn’t subsidize pump prices, leading petrol companies to pass on rising gasoline and diesel costs to car owners.
Sales at petrol service stations rose 49.2 percent in February from a year earlier, and fell 8.3 percent from the month before.
Department store sales increased 1.5 percent in February from a year earlier, and fell 15 percent from January, today’s report showed.
Purchases of furniture and household equipment dropped 5.3 percent from a year earlier. Apparel and footwear sales declined 6.1 percent and those of watches and jewelry advanced 1.7 percent from a year earlier.