OCBC has forecasted that retail sales will rebound by 12.5% YoY in 2021.
Retail sales continue to fall for the 23rd month as December 2020 sales dipped by 3.6% YoY, bringing the full year of 2020 contractions to fall by 15.3% YoY, according to OCBC.
The figure even went lower than the forecast for December, which was -2.9%YoY, and even lower than the Bloomberg median estimate of 2.2% YoY.
“On a seasonal adjusted basis, retail sales in December contracted 0.9% mom as Singaporeans surprisingly pulled back on festive spending, and is only the second time since the lifting of the Circuit Breaker in early June that consumption declined on a monthly basis,” said OCBC economist Howie Lee.
Lee observed that despite contraction in overall retail sales, sales of computers and telecommunication equipment rose by 24.8% YoY in December 2020 in addition to November’s growth of 28.8% YoY.
“This reflects the broader trend of increased consumer demand for electronics goods, as structural changes in the way people interact and work have encouraged many to continuously upgrade their technological infrastructure,” Lee added.
On the other hand, department stores and apparel remained in the negatives with decreases by 28.7% YoY and 22.7% YoY, respectively.
In 2021, Lee said that retail sales will bounce back by 12.5% YoY that will be largely due to low base from the pandemic however, retail spending level will not return to pre-pandemic levels until herd immunity is achieved within the local population and until Singapore opens up its borders to international travellers.