Falling COE premiums spurred purchases.
Singapore retail sales beat market expectations after growing at a faster pace at 2% YoY in June with car sales leading the positive momentum, according to data from the statistics department.
Motor vehicle sales surged 9.7% YoY and 16.5% MoM as residents scrambled to buy cars amidst declining COE premiums which bottomed at $25,000 in early July for category A and $33,900 for category B.
In fact, retail sales would have risen at a measly 0.2% YoY with the exclusion of auto sales.
Sales of recreational goods, in particular sporting gear, also received a World Cup boost after rising 5.7% YoY and 8.4% MoM in June. Petrol service station receipts, medical goods and toiletries, wearing apparel and footwear also rose 9.3%, 5.8% and 2.4% respectively.
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On the other hand, sales of computer and telecommunications equipment; watches and jewellery; and optical goods and books fell by 8.6%, 9.6% and 2.6% respectively.
The positive growth spurt brought about by the surge in car sales is not expected to extend into the second half of the year amidst escalating trade tensions, according to OCBC Treasury Research.
“Looking ahead, we anticipate that retail sales could average 0.2% yoy for 2018, which is very subdued compared to the 1.8% yoy seen last year,” OCBC Treasury Research said in a statement.
“This is given the more cautious economic outlook amid the global trade tensions which is affecting international trade, investments and business confidence, including Singapore, as warned by PM Lee during his National Day message.”
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