Singaporean Economy Suffers Due to Drop in Retail Sales Value
Singapore, with its seventh highest GDP per capita in the world, has often been regarded as the easiest place to do business since the past decade. Singaporean economy is often considered as free, innovative, dynamic, competitive and business friendly that has provided business growths and attracted large foreign investments.
However, the year 2020 has not been so great for Singaporean retail sales that fell to its steepest on a year-on-year basis in May. A data released by the Department of Statistics (SingStat) on Friday stated that while the country was still under a COVID-19 “circuit breaker”, the sales recorded 52.1 percent drop.
Also known as the Singapore lockdown, the 2020 Singapore circuit breaker measures were brought by the government in response to the COVID-19 pandemic in the country on April 7. The existing measures were tightened until May 4. However, shops providing essentials, followed by barber shops, home-based bakeries, confectionaries etc. were opened by mid-May. Face-to-face lessons for smaller groups in graduating cohorts were also resumed by schools later.
The Singaporean economy was expected to reopen in three phases which were named as “Safe Reopening” (phase 1) starting on June 2, “Safe Transition” (phase 2) starting on June 19, and finally “Safe Nation” (phase 3). Nearly, 44 percent of Singaporean workforce comprises of skilled non-Singaporeans, each of whom remains affected by the lockdown measures.
The experts believe that it won’t be easy for Singapore to overcome from the long and intense economic downturn. There is a chance that the Singaporean economy might enter into a recession this year. Other than the motor vehicles, the Singaporean retail sales fell to 45.2 percent, which was further low compared to April. The seasonally adjusted retail sales declined 21.5 percent in May.
It was expected that the Singaporean retail sales would recover after Phase 2, but the results show that the slump could cause the full-year sales to contract more than three times to that experienced in 2019. In short, it’s now clear that the retail bounce would not be enough to compensate for the shortfall.
The estimate total Singaporean retail sales value in May was about S$1.8 billion, 24.5 per cent of that came from online retail sales, driven by supermarkets, computer and telecommunications equipment, and furniture and household equipment. The SinStat data stated that the online retail sales of these products made up 94.3 percent, 93.6 percent and 9.6 percent of the total sales of their respective industries.
Except the groceries, hypermarkets, mini-marts and convenience stores, all other stores saw a year-on-year decline last month. The sale of watches, jewellery, department stores, and wearing apparel too consequently dropped between 89.1 percent and 96.9 percent. Similarly, the sales of optical goods and books, furniture and household equipment and motor vehicles industries also fell, altogether affecting Singaporean retail sales value.
When compared with last year’s decline in food and beverages services, some improvements were noted, despite the fact that these sectors were operating only on takeaway/delivery basis. Meanwhile, the government is hoping that the Singaporean economy would soon recover since the changes hitting the retail sales value were expected.
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