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Singapore consumers expect inflation to go down

Singapore consumers are expecting inflation to continue to declinein the next one to five years, the latest findings of the SKBI-MasterCard Singapore Index of Inflation Expectations (SInDEx) reveals.

The SInDEx, which was jointly developed by Singapore Management University’s Sim Kee Boon Institute for Financial Economics (SKBI) and MasterCard, is derived from an online survey of around 400 randomly selected individuals from Singapore households.

In the latest survey conducted in September 2013, consumers shared their views on perceived values of economic variables over the next one to five years.

“Inflation expectations of Singaporeans for overall or headline rates have generally been quite grounded as we have seen in the previous eight rounds of the SInDEx Survey. However, CPI-All Inflation came down from the first quarter of 2013 owing to a slew of macro-prudential factors like property cooling measures and restrictions in car loans, and an emphasis on deleveraging of household debt and disbursement of HDB S&CC rebates," said
Assistant Professor Aurobindo Ghosh, co-creator of SInDEx, and Project Director of SMU SKBI said.

“Additionally, there is an expectation of pass through costs, including domestic ones like wages and rental, and imported ones like oil prices, which might have caused elevated expectations of price rises in the medium term. For policymakers, this might indicate some risks to anchoring of medium term inflation expectations for both headline rate and inflation rate without accommodation and private transportation costs," he added.