Singapore retailers are not hopeful that ‘revenge shopping’ after the lockdown can help bring back sales

A decline in cases found outside the dormitories paved the way for Singapore to reopen its economy starting June 2, after almost two months of partial lockdown that the government called a “circuit breaker.” The further easing on Friday allows more activities to resume with precautionary measures in place, including shopping at physical retail stores and dining out.

The country’s lifting of restrictions has come earlier than some expected, which could help limit the economic slowdown in Singapore, said Selena Ling, head of treasury research and strategy at Singaporean bank OCBC.

“We could actually see some pent-up demand and retail sales could snap back a little bit in June,” she told CNBC’s “Capital Connection” on Friday.

“But I would caution that this is probably going to be a fairly muted recovery from now. The litmus test really would be probably two weeks later when we see whether there is any pick up in terms of Covid-19 cases coming back again,” she said, referring to the name of the coronavirus disease.

Ling explained that China’s experience has shown that a resurgence in cases could mute any recovery in consumer demand. Still, she said recent indicators suggest that the Singapore economy passed its trough in April.

That, along with the planned government spending, could help Singapore’s economy to register a less severe contraction of 5% this year, said Ling.

The government has announced four stimulus packages worth close to 100 billion Singapore dollars ($71.8 billion) — or nearly 20% of gross domestic product.