Singapore retail sales miss expectations, reflect weakening discretionary demand

Singapore December retail sales came in worse than expected. Data showed that headline retail sales rose 2.9% in December, less than consensus for a 3.6% rise. Indeed, ex-autos sales fell 3.6% in December, extending the 2.1% drop in November, reflecting weakening discretionary demand.

Spending on necessities was weaker in Dec, reflecting possibly more outbound travel but also a possible sign of increasing thrift at the household level as well. The trend increase in consumer interest rates was probably an additional headwind, which could dampen discretionary purchases further.

"With greater growth headwinds, especially for the services economy, we now see increasing risk to our call for the MAS to maintain its SGD NEER policy band at its meeting in April 2016." said Barclays in a report.