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Singapore consumers expect inflation to continue to fall in the year ahead amid a persistently fragile global economic environment, according to a quarterly study by SMU and MasterCard. Programme Director of the Sim Kee Boon Institute for Financial Economics at SMU (SKBI) and co-creator of the survey, Dr Aurobindo Ghosh, said, “Survey respondents seemed to feel that local structural factors like increasing wages from a tight labour market and possibly other pass-through costs including higher COE premiums have not significantly increased the overall prices.”

Singapore consumers continue to expect inflation to edge downwards, said the latest SKBI-MasterCard Singapore Index of Inflation Expectations report – produced by the Sim Kee Boon Institute for Financial Economics at SMU (SKBI) and sponsored by MasterCard. Responses from a representative sample of 400 local consumers polled online in March produced a composite index showing that the general public expects inflation of 4.26 per cent for the year ahead, down from 4.4 per cent in December last year. Consumer expectations of headline inflation fell to 4.12 per cent – the lowest expected level since the survey's launch in September 2011 – from 4.37 per cent a quarter earlier. Core inflation, which strips out accommodation and private road transport costs, is also expected to fall to 4.32 per cent, from expectations of 4.44 per cent in December, said the report. SKBI Programme Director and co-creator of the survey, Aurobindo Ghosh said, "Given that the medium-term expectations are fairly anchored, we will not see huge fluctuations in average inflation expectations but possibly an increase due to increased uncertainty in the global financial system."

Executive Director of the Australian Centre for Financial Studies, Deborah Ralston, shared the findings of the Melbourne Mercer Global Pension Index (MMGPI) 2012 at the SMU Centre for Silver Security. The index ranked Singapore 13^th among the 18 countries studied and gave its pension scheme a ‘C’ grade. The index assesses a pension system on three fronts: adequacy (what do you get out of the system), sustainability (can the system keep delivering) and integrity (can you trust the system).

Online polls of more than 500 Singaporeans in February showed that the public here had expected an inflation rate of 4.55 per cent. However, their expectations fell to 4 per cent when polled again in May. Singapore does not compile official inflation expectations of households, but these results were broadly in line with those of the SKBI-MasterCard Singapore Inflation Expectations Index (SinDEx).

According to the latest findings of the SKBI-MasterCard Singapore Index of Inflation Expectations (SInDEx), jointly developed by SMU and MasterCard, Singapore consumers think that prices of goods and services will rise more slowly over the next one to five years. They also think that core inflation a year from now will reach a new survey low of 4.05 per cent, down from the 4.32 per cent they estimated in March. Core inflation excludes accommodation and private transport costs.

Consumers in Singapore expect inflation for the year ahead to go down by another notch amid bleaker global economic cues, said the latest SKBI-MasterCard Singapore Index of Inflation Expectations (SInDEx) report. The online poll of 400 randomly selected individuals in June showed that consumers expect a headline inflation rate of 3.91 per cent for the year ahead, down from the previous survey's 4.12 per cent in March. Better-than-expected labour and housing market reports in the US point to an earlier tapering of the Federal Reserve's stimulus spending, which may put upward pressure on interest rates, said SMU Sim Kee Boon Institute for  Financial Economics (SKBI) Programme Director and co-creator of the SInDEx, Aurobindo Ghosh. That people are expecting an end to what has been an unprecedented period of very low interest rates which could also have been signalled by the report's composite index of what inflation might be like in five years' time. This fell to 4.68 per cent, its lowest level since the start of the survey, Dr Ghosh said. "Furthermore, Singapore is facing a weakening impact of imported inflation owing to a cyclical slowdown of some of the Asean economies, as well as regional economies like China and India," he added.

According to the latest findings of the Singapore Index of Inflation Expectations (SInDEx), which was jointly developed by SMU Sim Kee Boon Institute for Financial Economics (SKBI) and MasterCard, Singapore consumers are expecting inflation to continue on a downward trend in the next one to five years amid slowdown in big emerging economies like China and Brazil and persistent weakness in the Eurozone. The finding is derived from an online survey of around 400 randomly selected individuals from Singapore households, and helps researchers understand the behaviour and sentiments of decision makers in Singapore households.

Director of the Sim Kee Boon Institute for Financial Economics at SMU and Professor of Economics and Finance Yu Jun, and Distinguished Term Professor of Economics at SMU Peter Philips, together with Professor Yangru Wu at Rutgers Business School, and Dr Shuping Shi at Australian National University, have created an early warning system for the financial industry. They designed the methodology and applied it to the vast amount of diverse data available in the financial markets. Similar to the SARS early warning system, Prof Yu explained that their method sets thresholds to classify the state of the financial market.

SMU Assistant Professor of Finance Aurobindo Ghosh, co-creator of SInDEx and Project Director of the Sim Kee Boon Institute for Financial Economics at SMU, said that the CPI numbers released last week were within expectations, but as inflation expectations are usually rather ‘sticky’, they are slow to react downwards. Singapore is a small and open economy, so it is affected by policies not just in Singapore but across the world, including imported inflation (which affects oil price movements and other commodities) and domestic pressure (such as rental and labour costs). In the medium term, if inflation is anchored, small fluctuations in prices should not affect long-term inflation expectations. From the survey, Singaporeans are generally aware of global economic events like the issue of Quantitative Easing and the impact which tapering will have on their household finances