Singaporeans' spending power to increase with new gov’t measures

Grocery retailers are expected to be key beneficiaries.

Singapore’s latest budget measures are set to enhance disposable income and stimulate consumer spending, according to RHB.

The government has announced several initiatives, including $800 in Community Development Council (CDC) vouchers for Singaporean households, with SGD500 disbursed this year. Eligible Housing & Development Board (HDB) households can also receive up to $760 in U-Save rebates to help with utility bills. Additionally, the ComCare Assistance scheme will see higher payouts to better support households in need.

Pensioners in the Singapore Allowance scheme will also see their monthly payments increase from $350 to $390, with the pension ceiling rising to $1,320.

To support sustainable living, HDB households will receive an additional $100 in climate vouchers, while private property households will continue to get $400. Singaporeans aged 21 and above will receive SG60 vouchers worth $600-800.

Additionally, a 60% income tax rebate, capped at $200, will provide further relief.

RHB said these measures are expected to boost consumer spending, particularly in food and retail. The CDC and SG60 vouchers will drive purchases at hawker centres, coffee shops, food courts, and supermarkets, whilst the enhanced climate vouchers will encourage the adoption of energy-efficient products.

The grocery retail sector is set to benefit the most, as higher disposable incomes drive demand for daily necessities.  In particular, Sheng Siong, which has strong exposure to the domestic market, and Dairy Farm could see positive impacts.

Moreover, the government will also raise co-funding for the Progressive Wage Credit Scheme, increasing support for wage hikes from 30% to 40% in 2025 and from 15% to 20% in 2026. This is expected to boost wages for lower-income workers and further increase household spending.

“As a whole, these measures will enhance the purchasing power of Singaporean consumers and can potentially flow into the domestic consumer downstream sub-segment at the food retail level and contribute to additional consumption for eligible consumers,” RHB said.