SINGAPORE: The inflation expectations of Singaporeans have fallen to a record low due to global and domestic factors, according to the findings of a Singapore Management University survey released on Monday (Jan 18).
The quarterly Singapore Index of Inflation Expectations (SInDEx), which examines the behaviour and sentiments of decision-makers in Singapore households, revealed that median expectations for headline inflation one year ahead was down to 2.74 per cent in December 2015, from 2.92 per cent in September. This is the lowest level of inflation expectations since the survey’s launch in September 2011, SMU said.
Assistant Professor Aurobindo Ghosh, from SMU Lee Kong Chian School of Business and Co-developer of SInDEx, said the interest rate lift-off by the US Federal Reserve in December 2015 from near-zero rates “created uncertainty, particularly surrounding the future course of normalisation of the US monetary policy”.
“Globally depressed demand, particularly from the emerging markets, and persistent commodity price downturn, might have reduced the overall expectations on inflation,” he said in the press release.
“Domestically, the pass-through price pressures remain mainly due to the tight labour market, though impact of lower rental prices and lower COE prices have led to a significant drop in overall inflation outlook,” he added.
The data for the SInDEx survey was collected online from about 500 consumers, and the sampling was done using a quota sample over gender, age and residency status to ensure the sample’s representativeness, said SMU.
