Singapore retail sales fall as consumers buy less food, clothing

Singapore’s retail sales fell in February as purchases of motor vehicles plunged and consumers spent less on food and clothing.

The index measuring purchases excluding automobiles fell 3.5% from a year earlier after gaining a revised 16% in January, the Statistics Department said in a statement today. Including vehicles, which are sold subject to government caps, total retail sales dropped 12.1%, compared with the median forecast for a 1.5% decline in a Bloomberg News survey of six economists.

Singapore’s consumer prices gained 5% or more in the first two months of 2011 and the central bank said yesterday inflation is expected to reach the upper end of its 3%- to-4% forecast range this year. The government has pledged to supplement salaries for lower-income earners and distribute cash and rebates to offset rising prices.

 

The data is “tempered by projected weak car sales,” Alvin Liew, a Singapore-based economist at Standard Chartered Plc, said before the report. “We remain optimistic about retail sales. A positive domestic labor market outlook and record tourist inflows” may boost sales in coming months, he said.

 

Adjusted for seasonal factors, overall retail sales fell 3.6% in February from January, when it dropped a revised 2.5%, today’s report showed.

 

Singapore controls pollution and congestion on its roads by selling limited permits for each automobile category, and the quotas may distort sales figures because motor vehicles are the biggest component of the retail index, accounting for about a quarter of the gauge.

 

The Statistics Department last month changed the base year for the index to 2010 from 2005.