Singapore’s retail sales fell for a 12th straight month in September, a slump that may ease as the island’s economic recovery and a rebound in tourist arrivals revives spending in the coming months.

 

The retail sales index dropped 11.8% from a year earlier after sliding a revised 4.7% in August, the Statistics Department said today. The median estimate of seven economists surveyed by Bloomberg News was for a 5% decline.

 

Singapore raised its 2009 economic forecast last month after gross domestic product grew for a second straight quarter in the three months through September, extending its recovery from the global recession and spurring a 55% gain in stocks. Tourism arrivals climbed 7.1% in September, the first gain in 15 months, and job losses have eased.

 

“This has been a better-than-expected year for the Singapore economy,” said Song Seng-Wun, an economist at CIMB-GK Securities Pte in Singapore. 

 

“Festive spending for the year-end and Chinese New Year is expected to be stronger, especially when the same time last year was so bad.”

 

Singapore’s economy is forecast to shrink 2% to 2.5% this year, less than a previous estimate for a contraction of as much as 6%, the government said last month.

 

Total employment rose for the first time in three quarters and companies fired fewer workers in the three months through September as the island emerged from its worst recession in more than four decades.

 

Excluding motor vehicles, retail sales fell 1.2% in September from a year earlier, after a 2.5% drop in August, today’s report showed. Adjusted for seasonal factors, sales fell 7.9% from August.

 

Department-store sales grew 3.9% from a year earlier, and supermarket sales increased 1.9%. Vehicle sales fell 36.3%, while purchases at gas stations dropped 11.9%.