SINGAPORE: Retail sales in the city-state rose more than expected in December as consumers rushed to buy items such as automobiles, watches and jewellery before last month's increase in sales tax.
The Statistics Department said retail sales rose 9.7% that month from a year earlier. The median forecast of six economists surveyed by Bloomberg Data was for a rise of 7.2%. Retail sales, seasonally adjusted, rose 5.2% from November.
On Jan 1, Singapore raised its goods and services tax (GST) by one percentage point to 5% to partially make up revenue it would lose with cuts in corporate and personal income taxes. The increase prompted some consumers to bring forward spending on large household items, analysts said.
“Some consumers just wanted to beat the GST rise,'' analyst Low Ping Yee of United Overseas Bank Group, the island's second largest bank, said in a televised interview with Bloomberg News. “The GST rise should have only a very modest impact on local consumption.''Retail sales rose 10.3% in November from a year earlier. Total retail sales value in December was estimated at S$2.49bil, compared with S$2.07bil in the previous month, the Statistics Department said.
Consumers are spending more as recent economic reports have shown that Singapore's economy is gathering strength.
Total retail sales for last year rose 8.2%, driven by an increase in the sale of cars after March, the statement said. – Bloomberg
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