Full-year outlook for retail improves due to China reopening
The revival will boost the travel and tourism sector in Singapore.
Retail sales are expected to improve in 2023 as the travel and tourism sector will revive due to the lifting of health restrictions in China.
For example, UOB said it upgraded its outlook to 5% as China is one of the top contributors to shopping receipts in Singapore.
The UNWTO projects international tourist arrivals could reach 80% to 95% of 2019 levels in 2023, allowing Asian tourism to recover, it said.
The 2023 retail sales growth forecast was upgraded from 2.3% to 5% due to China's lifting of its zero-Covid policy.
Hospitality industry to grow
The hospitality industry will also benefit the most from China border reopening, RHB said.
The analyst expects that retail sales growth might slow down in Asia for the first half of 2023 but Singapore and other Asian markets will get a short-term boost during the Lunar New Year events.
In December, online sales accounted for 12.9% of total retail sales, declining 15% in November.
There may be declining supermarket sales but ING said it was offset by strong spending at department stores and recreational goods.
Looking ahead, cost pressures and global slowdown are expected to subdue retail sales this year. The GST could also impact retail sales, ING added.
Despite this, ING believed that the return of tourists may help improve retail sales.