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SINGAPORE - These are the research findings of the 45th round of the DBS-SKBI Singapore Index of Inflation Expectations (SInDEx) Survey at the Sim Kee Boon Institute for Financial Economics (SKBI), Singapore Management University (SMU).

One-year-Ahead headline inflation expectations rose to 4.6% in September 2022, compared to 3.9% in June 2022. This is the highest recorded one-year-ahead inflation expectations since December 2011 when it polled at 4.6%. As expected, it is a higher reading than the historical (2012-2021) third quarter average of 3.18%.

As a comparison benchmark, data from the Monetary Authority of Singapore Survey of Professional Forecasters (MAS SPF) released in September 2022 showed that the median forecasts of CPI-All Items inflation for 2023 was 3.5% and MAS Core inflation was 3.1%. The latest CPI data release from the Department of Statistics showed that CPI-All Items rose by 5.7% in January–August 2022, compared to the same period in 2021, with the latest August 2022 monthly inflation print coming in at 7.5% year on year. On 14 October 2022, MAS further tightened monetary policy by re-centering the mid-point of the S$ nominal effective exchange rate (S$NEER) policy band up to its prevailing level. This was the fifth consecutive tightening move since October 2021. The October policy move, together with the previous monetary policy tightening moves, aims to slow the momentum of inflation and ensure medium-term price stability.

The overall CPIEx Inflation Expectations, after adjusting for potential component-wise behavioural biases and re-combining across components, slightly increased to 5.7% in September 2022 from 5.5% in June 2022. Inflation expectations of all individual components remained unchanged compared to the June 2022 survey at 5.0%, except the inflation expectations for Food increased to 6% in September 2022 survey from 5% in the June 2022 survey and that of Transportation remained unchanged at 8.0% from the June 2022 survey.

We also observed that the free response overall inflation expectations after accommodating for potential behavioral biases increased to 6% in September 2022 compared to 5.0% in June 2022. Consumer response-based surveys are susceptible to various behavioral biases unlike surveys given to professional economists like the MAS Survey of Professional Forecasters (SPF) who have more access to relevant and current information and research. To reduce the impact of such biases DBS-SKBI SInDEx survey provides some current and relevant aggregated information in the survey questionnaire developed by researchers at SMU and partners under the supervision of the Founding Principal Investigator, SMU Assistant Professor of Finance, Aurobindo Ghosh.

In the September 2022 wave, continuing from June 2022 survey, we took a more forward-looking approach to analyse the impact of global economic developments on Singapore’s economic growth and inflation.

Overall, despite policy stabilisation to alleviate the impact of the pandemic and its aftermath, given the global uncertainty and economic disruptions, Singaporean consumers felt that the pandemic will have a moderately negative impact on Singapore’s economic growth.

Singaporean consumers also felt they will have to fork out slightly higher amounts on spending owing mainly to price increases despite possible cutbacks on consumption.

Starting from September 2022, we asked consumers what they feel is the main reason for the general increase in prices. About 29.7% of consumers believe it is due to the impact of the ongoing Russia-Ukraine conflict, followed closely by supply chain disruptions (23.7%) and impact of Covid-19 easing measures (23.5%). 

We found that the impact of the latest domestic and global developments on inflation expectations for Food, Transport, Housing and Utilities to be slightly negative towards increasing inflation.

In addition, the impact of the latest domestic and global developments on overall One-year-Ahead inflation and Five-year-Ahead inflation expectations was found to be negative but limited towards increasing inflation.

There is however some divergence among respondents regarding the impact on inflation expectations for certain components including food, clothing & footwear, and overall inflation expectations where we find a distinct bimodal distribution, which means there are two large groups who disagree whether the impact would be positive or negative reflecting the global uncertainty.

Following the academic work by Alberto Cavallo of Harvard Business School (2020) and the UK Office of National Statistics (ONS), respondents were asked if there were any substantive changes to their consumption basket. In September 2022, results indicate that a majority of components like Food, Transport, Housing and Utilities, Healthcare, Recreation and Culture, Household Durables and Services are expected to see limited increases. This indicates that in line with the increase in One-year-ahead inflation expectations, consumers expect their spending to rise slightly.

Excluding expectations of accommodation and private road transportation related inflation, the One-year-Ahead CPIEx core inflation expectations in September 2022 survey increased to 4.4 % from 3.9% in June 2022, in line with overall inflation expectations.

For a subgroup of the population who owns their accommodation and uses public transport, the One-year-Ahead CPIEx core inflation expectations increased to 4.6% in September 2022 from 3.8% in June 2022, in line with the change in overall and core inflation expectations. This sub-sample measurement is potentially more representative than the full sample measurement, due to high home ownership and public transport ridership in Singapore.

The One-year-Ahead composite index SInDEx1 that puts less weight on more volatile components like accommodation, private road transport, food and energy related expenses polled at 4.5 in September 2022 from 4.0 % in June 2022. It is significantly higher than the average of 3.1% since the survey’s inception in 2012 till 2021.

In addition, around 10.2% of the Singaporeans polled expect a more than 5.0% reduction in salary in the next 12 months. This is a lower proportion compared to 11.5% in June 2022. The median salary increment expectation remained unchanged compared to June 2022 survey at an increase by 1.0%-5.0%.

Figure 1: One-year-Ahead inflation expectations: The chart shows the quarterly DBS-SKBI CPIEx (CPI-All Item) and DBS-SKBI CPIEx Core (Excluding accommodation and private road transportation components) One-Year-Ahead Inflation Expectations polled in the quarterly online Singapore Index of Inflation Expectations (SInDex) Survey conducted Sep 12-20, 2022.

 

DBS Chief Economist and Managing Director of Group Research, Dr. Taimur Baig commented, “With the various measures ranging from 4 to 6%, ongoing developments with respect to inflation expectations are somewhat concerning. Through the course of this year, inflation expectations have risen considerably, in response to global price developments. Growth has already slowed in Singapore, but at the same time MAS is compelled to continue tightening monetary policy. Such tightening may be uncomfortable for many, but the regressive impact of high inflation is far more pernicious.”

SKBI Director, Professor Dave Fernandez commented, “The latest inflation data, including importantly the September CPI report in the US, continues to surprise on the upside, which is consistent with what inflation expectations surveys are showing. The September monthly surveys from the NY Fed saw 3-year and 5-year inflation expectations edge up, but 1-year expectations dropped, while in the University of Michigan survey, 5-year inflation expectations also fell. These contrast with our Singapore survey results, so it will be important to track if this US-Singapore divergence continues or if our surveys converge in the coming months.”

SMU Assistant Professor of Finance and Founding Principal Investigator of the DBS-SKBI SInDEx Project, Aurobindo Ghosh highlighted, “The International Monetary Fund (IMF) in their October 2022 World Economic Outlook highlighted the Cost-of-Living Crisis while projecting slower 2.7% global growth in 2023, their weakest forecast since 2001 barring global crises like the Global Financial Crisis and the peak of the COVID-19 pandemic. However, global inflation is forecast in 2023 to be 6.5% from 8.8% in 2022. DBS-SKBI Singapore Index of Inflation Expectations findings seem to be tracking the global outlook of uncertainty where Singaporean consumers expect a slight negative impact on growth, while overall inflation expectations have heightened since our last survey in June 2022. Both medium-term headline and core inflation expectations are the highest they have polled since December of 2011, nearly 11 years ago. In summary, we find that component-based inflation expectations show continued and persistently high values for food, transportation, housing and utilities. As households expect prices to continue rising, they are allocating an increasing share of their budget to spending on these components, consistent with academic work by Carvallo (2020) and UK Office of National Statistics (ONS).”

For the longer horizon, the Five-year-Ahead CPIEx inflation expectations increased to 4.7% in the September 2022 survey from 4.5% in June 2022. The current polled number is higher than the third quarter average of 3.9% since the survey’s inception in 2012 till 2021.

The Five-year-Ahead CPIEx core inflation expectations (excluding accommodation and private road transportation related costs) also increased to 4.7% in September 2022 from 4.3% in June 2022. Overall, the composite Five-year-Ahead SInDEx5 also rose to 4.7% in September 2022, from 4.4% in June 2022. In comparison, the third quarter average value (since the survey’s inception in 2012 till 2021) of the composite Five-year-Ahead SInDEx5 is 3.8%.

“The long term five-year-ahead inflation expectations have not increased as rapidly as the medium-term inflation expectations raising the hope of more anchored or grounded inflation expectations. There is more stabilisation in the life vs livelihood debate where for every person choosing life over livelihood, about 4 choose livelihood over life, higher compared to the June 2022 survey. This is signalling that we have approached a new normal of endemic Covid-19 and most advanced economies including Singapore are on a similar path to pursue non-inflationary growth despite challenging global macroeconomic conditions.” Prof Ghosh commented.

SINGAPORE - These are the research findings of the 46th round of the DBS-SKBI Singapore Index of Inflation Expectations (SInDEx) Survey at the Sim Kee Boon Institute for Financial Economics (SKBI), Singapore Management University (SMU).

• One-year-Ahead headline inflation expectations fell to 3.8% in December 2022, from 4.6% in September 2022. This is a significant paring of inflation expectations from the 11-year high in September 2022. The fourth quarter one-year-ahead inflation expectations is still higher than the average one-year-ahead headline inflation expectations of 3.2% since inception in 2011.
• As a comparison benchmark, data from the Monetary Authority of Singapore Survey of Professional Forecasters (MAS SPF) released in December 2022 showed that the median forecasts of CPI-All Items inflation for 2023 was 5.2% and MAS Core inflation was 4.0%. The latest CPI data released from the Department of Statistics shows that CPI-All Items rose by 6.1% in January–November 2022, compared to the same period in 2021, with the latest November 2022 monthly inflation print coming in at 6.7% year on year. On 14 October 2022, MAS further tightened the monetary policy by re-centering the mid-point of the S$ nominal effective exchange rate (S$NEER) policy band up to its prevailing level. This was the fifth consecutive tightening move since October 2021. The October 2022 policy move, together with the previous monetary policy tightening moves, aims to slow the momentum of inflation and ensure medium-term price stability.
• The overall CPIEx Inflation Expectations, after adjusting for potential component-wise behavioural biases and re-combining across components, slightly increased to 6.4% in December 2022 from 5.7% in September 2022. Inflation expectations of all individual components also recorded some divergence in expectations. From September to December 2022, expectations of Food Inflation increased from 6% to 7%, housing and utilities increased from 5% to 7%, while healthcare inflation expectations miscellaneous components including personal care both rose from 5% to 6%. On the other hand, transportation inflation expectations dipped slightly to 7% from 8%. The remaining components inflation expectations including education, recreation & culture, household durables, clothing and footwear and communications remained steady at 5% between September and December 2022 surveys.
• We also observed that the free response overall inflation expectations after accommodating for potential behavioural biases remained unchanged at 6% in December 2022 compared to September 2022.  
• In the December 2022 wave, continuing from June 2022 survey, we took a more forward-looking approach to analyse the impact of global economic developments on Singapore’s economic growth and inflation.
• Overall, given the global uncertainty, tightening of monetary policies and economic and geo-political disruptions, Singapore consumers felt that the pandemic will have a moderately negative impact on Singapore’s economic growth.
• Singapore consumers also felt that over the next 12 months, they will have to spend slightly higher amounts owing mainly to price increases despite possible cutbacks on consumption.
• In December 2022, we polled consumers for their sentiment about the overall inflation scenario over the next 12 months. Around 41% of those surveyed expect inflation to decrease while 45% felt that it will increase.
• The main reasons for reduction in inflation polled are slowdown in global growth (39%) and central banks in major economies raising interest rates (38.5%). Resolution of pandemic-induced supply chain disruptions are also expected to relieve price pressures. The main reasons cited by respondents for increase in inflation over the next 12 months were: central banks in major economies raising interest rates (30.5%), followed by geopolitical uncertainties due to the Russia-Ukraine conflict (25.8%) and higher demand due to relaxation of pandemic restrictions. Lingering supply chain disruptions account for about 13% of those who expect prices to go up.
• In the December 2022 survey, we found current economic conditions not to have a discernible impact on one-year-ahead and five-year-ahead inflation expectations except a slight negative price impact on transportation.
• There were however some divergences among respondents regarding the impact on inflation expectations for certain components including food, transportation, housing & utilities, healthcare, clothing & footwear, household durables & services, and overall one-year and five-year ahead inflation expectations where we find a distinct bimodal distributions, which means there are two large groups who disagree whether the impact would be positive or negative reflecting the global uncertainty.
• Following the academic work by Alberto Cavallo of Harvard Business School (2020) and the UK Office of National Statistics (ONS), respondents were asked if there were any substantive changes to their consumption basket. In the December 2022 survey, results indicate that respondents expect the consumptions baskets to remain unchanged over the next twelve months, signalling some normalisation of post-pandemic relative consumption and price patterns. 
• Excluding expectations of accommodation and private transportation inflation, the One-year-Ahead CPIEx core inflation expectations in December 2022 survey declined to 3.8% from 4.4% in September 2022, in line with overall inflation expectations.  
• For a subgroup of the population who owns their accommodation and uses public transport, the One-year-Ahead CPIEx core inflation expectations decreased to 3.6% in December 2022 from 4.6% in September 2022, in line with the drop in overall and core inflation expectations. This sub-sample measurement is potentially more representative than the full sample measurement, due to high home ownership and public transport ridership in Singapore.  
• The core CPIEx Inflation Expectations (excluding accommodation and private road transportation expenses), after adjusting for potential component-wise behavioural biases and re-combining across components, increased to 6.1% in December 2022 from 5.5% in September 2022. The free response core CPIEx Inflation Expectations also increased to 6% in December 2022 from 5% in September 2022 poll. 
• The One-year-Ahead composite index SInDEx1 that puts less weight on more volatile components like accommodation, private road transport, food and energy related expenses polled at 3.8% in December 2022 from 4.5% in September 2022. It is significantly higher than the average of 3.2% since the survey’s inception in 2011 till 2021. 
• In addition, in December 2022, around 10.8% of the Singaporeans polled expect a more than 5.0% reduction in salary in the next 12 months. This is a similar proportion compared to 10.2% in September 2022. The median salary increment expectation remained unchanged compared to September 2022 survey at an increase by 1.0%-5.0%.

Figure 1: One-year-Ahead inflation expectations: The chart shows the quarterly DBS-SKBI CPIEx (CPI-All Item) and DBS-SKBI CPIEx Core (Excluding accommodation and private road transportation components) One-year-Ahead Inflation Expectations polled in the quarterly online Singapore Index of Inflation Expectations (SInDex) Survey conducted Dec 20-28, 2022.

 

DBS Chief Economist and Managing Director of Group Research, Dr. Taimur Baig commented, “After a year-plus period of high and rising prices, the global economy experienced a welcome respite toward the end of 2022 as energy and food prices corrected amid a general slowing of demand and improving supply side conditions. For Singapore, a widely-announced sales tax increase this year has been an additional source of information in forming expectations. Taking the survey results in totality, local inflation trends are largely reflecting global factors, with the ongoing respite, as welcome as it is, too little and too recent to suggest last year’s sharp inflation bout is conclusively over.”

SKBI Director, Professor Dave Fernandez commented, “The decline in inflation expectations between the third and fourth quarters of last year finally aligns Singapore with what households elsewhere are expecting. For example, in the US, the NY Fed survey has fallen by 1.8%-pts since peaking in June, and in Australia, the Melbourne Institute survey is down 0.9%-pts over the past five months. It bears watching closely whether 4Q was indeed an inflection point for inflation expectations in Singapore.”

SMU Assistant Professor of Finance and Founding Principal Investigator of the Quarterly DBS-SKBI SInDEx Project, Aurobindo Ghosh highlighted, “The World Bank Group in their Global Economic Prospects recently released in January 2023 have sharply adjusted global growth forecasts downwards to 1.7% in 2023, from earlier forecasts of 3%, citing elevated global inflation, higher interest rates, and other geopolitical tensions causing disruption and affecting investment. This elevated risk of a global downturn in the face of rising interest rate to tackle persistent inflation and cost of living is causing a ‘cognitive dissonance’ among both consumers and policy economists. Domestically, despite a forward guidance of a strong Singapore dollar by the Monetary Authority of Singapore, Singapore consumers are facing elevated price pressures from a tighter labour market, accommodation, utility, food costs and potentially a higher GST rate of 8%. However, a slowing growth forecast for major trading partners seem to dampen a faster growth in prices.”

“The divergence between the aggregated component-wise free response and the more structured questions might be attributable to behavioural biases that consumer response-based surveys like DBS-SKBI SInDEx surveys are susceptible to. To reduce the impact of such biases, the DBS-SKBI SInDEx survey provides some current and relevant aggregated information in the survey questionnaire developed by researchers at SMU and partners. However, heightened global economic uncertainty makes it challenging for Central Banks to anchor medium-term inflation expectations among economic participants. This is evident with 40% of survey respondents feeling that inflation will decline and 45% feeling that inflation will increase.” Prof Ghosh observed.

For the longer horizon, the Five-year-Ahead CPIEx inflation expectations pared to 4.2% in the December 2022 survey from 4.7% in September 2022. The current polled number is still higher than the fourth quarter average of 4.0% since the survey’s inception in 2011 till 2021.

The Five-year-Ahead CPIEx core inflation expectations (excluding accommodation and private road transportation related costs) also dropped to 4.1% in December 2022 from 4.7% in September 2022. Overall, the composite Five-year-Ahead SInDEx5 also declined to 4.1% in December 2022, from 4.7% in September 2022. In comparison, the fourth quarter average value (since the survey’s inception in 2011 till 2021) of the composite Five-year-Ahead SInDEx5 is 3.9%.

After adjusting for potential behavioural biases, the free response Five-Year-Ahead Headline Inflation Expectations declined slightly from 7% in September 2022 to 6% in December 2022. This signals that is some anchoring of long term inflation expectations despite the high degree of global geopolitical uncertainty and global economic headwinds.

“The long term five-year-ahead inflation expectations have moderated along with the medium term one-year-ahead inflation expectations. Furthermore, despite divergence in views in the medium-term inflation expectations, there is a more stable decline in long term inflation expectations raising the hope of more anchored or grounded inflation expectations to a new normal. Despite the advent of some new variants, a natural progression in a life cycle of a virus, there is more normalisation in an endemic Covid-19 world in the life vs livelihood debate where for every person choosing life over livelihood, about 4 choose livelihood over life, unchanged from September 2022 survey. Policymakers around the world seem to be treading more cautiously on curbing inflation to effect a ‘soft landing’ with policy normalisation amidst global headwinds for economic growth,” Prof Ghosh commented.

 

Singapore - These are the research findings of the 47th round of the DBS-SKBI Singapore Index of Inflation Expectations (SInDEx) Survey at the Sim Kee Boon Institute for Financial Economics (SKBI), Singapore Management University (SMU).

• One-year-Ahead headline inflation expectations rose to 4.6% in March 2023, from 3.8% in December 2023. This retracing of inflation expectations to September 2022 levels reflects divergent global economic signals. On one hand, global demand has been boosted with relaxation of pandemic travel restrictions, reopening of China and resolution of some supply chain disruptions. However, on the other hand, headwinds to global growth from the persistent cost-of-living crisis, tightening financial conditions, the impact of the prolonged Russia-Ukraine conflict and finally, emerging Sino-US trade tensions have dampened the global outlook. The first quarter one-year-ahead inflation expectations continue to be higher than the average one-year-ahead headline inflation expectations of 3.3% since inception between 2012-2022.
• As a comparison benchmark, data from the Monetary Authority of Singapore Survey of Professional Forecasters (MAS SPF) released in March 2023 showed that the median forecasts of CPI-All Items inflation for 2023 was 5% (for 2024, 3.1%) and MAS Core inflation was 4.1% (for 2024, 2.9%). The latest CPI data release from the Department of Statistics showed that CPI-All Items rose by 6.5% in January–February 2023, compared to the same period in 2022, with the latest February 2023 monthly inflation print coming in at 6.3% year on year. On 14 April 2023, MAS maintained the rate of appreciation of the S$NEER policy band, following five consecutive tightening moves between October 2021 - October 2022. These moves have already tempered the momentum of inflation and their impact is still working through the economy. The current appreciating path of the S$NEER policy band will continue to reduce imported inflation and help curb domestic cost pressures.
• The overall CPIEx Inflation Expectations, after adjusting for potential component-wise behavioural biases and re-combining across components, declined to 5.2% in March 2023 from 6.4% in December 2022. Inflation expectations of almost all individual components held steady or recorded declines with some divergence in expectations. From December 2022 to March 2023, one year ahead expectations of Food Inflation declined from 7% to 6%, transportation from 7% to 5%, housing and utilities from 7% to 5%, healthcare from 6% to 5%, miscellaneous components including personal care from 6% to 5%. The remaining components inflation expectations including education, recreation & culture, household durables, clothing and footwear and communications remained steady at 5% between December 2022 and March 2023 surveys.
• We also polled free response overall inflation expectations after accommodating for potential behavioural biases which declined from 6% in December 2022 to 5% in March 2023 survey.
• In the March 2023 wave, continuing from June 2022 survey, we took a more forward-looking approach to analyze the impact of global economic developments on Singapore’s economic growth and inflation.
  • Overall, given the geo-political unrest and uncertainty, financial sector volatility, continuation of tightening of monetary policies by major economies, tight domestic job market and inflationary pressures Singaporean consumers felt that these developments will have a slight negative impact on Singapore’s economic growth over the next 12 months.
  • Singaporean consumers also felt that over the next 12 months, they will have to spend slightly higher amounts owing mainly to price increases.
  • In March 2023, we polled consumers on how they feel the overall inflation scenario would unfold in the next 12 months. Around 50% (compared to 41% in December 2022) of those surveyed expect inflation to decline while 41% (compared to 45% in December 2022) felt that it will increase.
  • The main reasons for for these shifts in consumers’ expectations are central banks in major economies raising interest rates (41%), second highest being slowdown in global growth (35%). Resolution of pandemic-induced supply chain disruptions are also expected to relieve price pressures. The main reasons cited by respondents for increase in inflation over the next 12 months were also central banks in major economies raising interest rates (36%), followed by higher demand due to relaxation of pandemic restrictions (27%) and geopolitical uncertainties due to the Ukraine-Russia conflict (23%). Lingering supply chain disruptions account for about 11% of those who thought prices will go up.
  • In the March 2023 survey, we found current economic conditions having a moderate negative impact on one-year-ahead and five-year-ahead overall inflation expectations. This slight negative impact is also polled across components like Food, transportation, housing and utilities, healthcare, clothing & footwear, household durables & services, but there was no discernable impact on education, recreation & culture, communications, and miscellaneous items including personal effects.
  • There were however some divergences among respondents regarding the impact on inflation expectations for certain components including food, transportation, housing & utilities, healthcare, clothing & footwear, household durables & services, and overall one-year and five-year ahead inflation expectations where we find a distinct bimodal distributions, which means there are two large groups who disagree whether the impact would be positive or negative reflecting the global uncertainty.
• Following the academic work by Alberto Cavallo of Harvard Business School (2020) and the UK Office of National Statistics (ONS), respondents were asked if there were any substantive changes to their consumption basket. In the March 2023 survey, results indicate that respondents expect the consumptions baskets to remain unchanged over the next twelve months signaling continued normalisation of post-pandemic relative consumption and price patterns across the board.
• Excluding expectations of accommodation and private transportation inflation, the One-year-Ahead CPIEx core inflation expectations in March 2023 survey elevated to 4.8 % from 3.8% in December 2022, in line with overall inflation expectations.
• For a subgroup of the population who owns their accommodation and uses public transport, the One-year-Ahead CPIEx core inflation expectations elevated to 4.7 % in March 2023 from 3.6% in December 2022, corroborating the increase in core inflation expectations. This sub-sample measurement is potentially more representative than the full sample measurement, due to high home ownership and public transport ridership in Singapore.
• However, unlike the fixed response which might be amenable to behavioural biases, core CPIEx Inflation Expectations (excluding accommodation and private road transportation expenses), after adjusting for potential component-wise behavioural biases and re-combining across components, declined to 5.3% in March 2023 from 6.1% in December 2022 survey. The free response core CPIEx Inflation Expectations also declined to 5% in March 2023 from 6% in December 2022 poll.
• The One-year-Ahead composite index SInDEx1 that puts less weight on more volatile components like accommodation, private road transport, food and energy related expenses polled at 4.7% in March 2023 elevated from 3.8 % in December 2022. It continues to be higher than the first quarter average of 3.4% since the survey’s inception from 2012 till 2022.
• In addition, in March 2023, around 9.8% of the Singaporeans polled expect a more than 5.0% reduction in salary in the next 12 months. This is a slightly less compared to 10.8% in December 2022. The median salary increment expectation remained unchanged compared to September 2022 survey at an increase by 1.0%-5.0%.

 

DBS Chief Economist and Managing Director of Group Research, Dr. Taimur Baig, commented, “Overall inflation may have peaked worldwide, but for the average individual, cost of living remains elevated, with pressures coming from rent, services, and operations. Inflation expectations are also somewhat volatile, which is understandable given the adjustments needed after a prolonged period of low and steady inflation pre-pandemic. We expect the lagged impact of several bouts of MAS policy tightening to eventually stabilise inflation expectations in Singapore.”

SMU Assistant Professor of Finance and Founding Principal Investigator of the Quarterly DBS-SKBI SInDEx Project, Aurobindo Ghosh, highlighted, “The International Monetary Fund (IMF) in their semiannual World Economic Outlook released in April 2023 highlights a ‘broad-based sharper-than-expected slowdown,’ with the cost-of-living crisis, geopolitical tensions like the Russia-Ukraine conflict, tightening financial conditions including collapse of the mid-size Silicon Valley Bank and vestiges of the global pandemic weighing down on the economic outlook including slower global growth. Domestically, Singapore consumers have been facing elevated price pressures emanating from a tighter labor market, and other pass-through costs including rental and energy. However, a discernable slowdown in global growth particularly in advanced economies despite the reopening in China which is also swaying the opinions of consumers who seem suggest medium term inflation expectations are still elevated.”

“Survey based inflation expectations measures are well-known to suffer from certain behavioural biases like the ‘anchoring bias,’ where the questionnaire design or positioning of options might influence opinions. DBS-SKBI SInDEx Inflation Expectations survey accommodated for some of the behavioural biases by using multiple choice based and free response options.

Accommodating for wider choice set, it seems that the behaviourally adjusted free response seem to correspond to the choice-based answers to reduce the ‘cognitive dissonance.’ Overall, the behaviourally adjusted responses suggest that the level of uncertainty might be reducing, and respondents provide a slightly elevated one-year ahead inflation expectations. However, opinions seem to be divided fairly even across the population about the direction of inflation outcome. This dichotomy, with one group expecting inflation to pare down while other expecting inflation rate to rise, can be reconciled by the duration it takes for tightening monetary policy reduce prices in a globalised marketplace, particularly for a small open economy like Singapore, which might see short run increases of prices followed by longer run declines,” Assistant Prof Ghosh observed.

For the longer horizon, the Five-year-Ahead CPIEx inflation expectations elevated to 5.2% in March 2023 from 4.2% in the December 2022 survey. The current polled number continues to be higher than the first quarter average of 4.2% since the survey’s inception in 2012.

The Five-year-Ahead CPIEx core inflation expectations (excluding accommodation and private road transportation related costs) also increased to 5.2% in March 2023 from 4.1% in December 2022. Overall, the composite Five-year-Ahead SInDEx5 also increased to 5.2% in March 2023 from 4.1% in December 2022. In comparison, the first quarter average value (since the survey’s inception in 2012 till 2022) of the composite Five-year-Ahead SInDEx5 is 4.0%.

After adjusting for potential behavioural biases, the free response Five-Year-Ahead Headline Inflation Expectations declined to 5% in March 2023 from 6% in December 2022, although free response Core Five-Year-Ahead Inflation Expectations remained unchanged at 6%.

“The unadjusted long term five-year-ahead inflation expectations seem to be treading closely with the medium term inflation expectations. However, when evaluating the longer term inflation expectations, adjusting for behavioural biases, the longer term inflation expectations seem to be moderating. This signals there is some degree of anchoring of long-term inflation expectations despite the high degree of global geopolitical uncertainty and global economic headwinds. Policymakers around the world seem to be treading more cautiously on curbing inflation to avoid a ‘hard landing’ with policy normalization amidst global headwinds for economic growth,” Assistant Prof Ghosh commented.

 

 

Methodology

DBS-SKBI SInDEx survey yields CPIEx Inflation Expectations (estimating headline inflation expectations) and related indices are products of the online quarterly survey of around 500 randomly selected individuals representing a cross section of Singaporean households. The survey is led by Principal Investigator Dr. Aurobindo Ghosh, Assistant Professor of Finance (Education) at Lee Kong Chian School of Business, SMU. The online survey, powered by Agility Research and Strategy, helps researchers understand the behavior and sentiments of decision makers in Singaporean households. DBS Group Research is a co-sponsor and research partner with the Sim Kee Boon Institute for Financial Economics (SKBI) at SMU.

The quarterly DBS-SKBI SInDEx survey has also yielded two composite indices, SInDEx1 and SInDEx5. SInDEx1 and SInDEx5 measure the One-year inflation expectations and the Five-year inflation expectations, respectively. The sampling was done using a quota sample over gender, age and residency status to ensure representativeness of the sample. Employees in some sectors like journalism and marketing were excluded as that might have an effect on their responses to questions on consumption behavior and expectations.

The DBS-SKBI SInDEx survey was augmented in June 2018, based on a joint research study conducted by SMU researchers in collaboration with MAS and the Behavioral Insights Team, where respondents were polled on their perceptions of components of the Consumers Price Index (CPI) and adjusted for possible behavioral biases prevalent in online surveys.

Based on the recommendations of the joint study, since March 2019 the research team has polled the One-year-Ahead inflation expectations of all of the major components of CPI-All Items inflation. For March 2022 survey, DBS-SKBI CPIEx headline and core inflation expectations indices increased compared to December 2022. However, the behaviorally adjusted component-wise and recombined inflation expectations had differential responses, causing the overall behaviorally adjusted indices to decline slightly. In free response answers, compared to December 2022 survey, respondents in the March 2023 survey polled One-year Ahead Headline rate declined. Following suit, one-year ahead core inflation expectations, adjusted for behavioral biases,   declined slightly. However, as a positive sign of anchoring, free response Five-year Ahead headline has declined slightly while the five-year-ahead core inflation was unchanged.

We introduced a new ratio in the June 2020 survey, on the life versus livelihood debate as an aftermath of the Covid 19 pandemic - the ratio of respondents who feels livelihood should be prioritised over life vis-à-vis those who feel the other way. This ratio remained unchanged at 3 in March 2023, slightly lower than December 2022. For every respondent who prioritised life over livelihood, there were about 3 who prioritised livelihood over life, signaling a level of stabilization though there are still divergent groups.

Singapore - These are the research findings of the 48th round of the DBS-SKBI Singapore Index of Inflation Expectations (SInDEx) Survey at the Sim Kee Boon Institute for Financial Economics (SKBI), Singapore Management University (SMU).

• One-year-Ahead headline inflation expectations rose to 4.9% in June 2023, from 4.6% in March 2023. There is a continuing but slowing trend of increase in inflation expectations that started in December 2022. Divergent signals emanating from the global macroeconomy, and from policymakers might be prompting variances in outlook in the perceptions of the consumers. On one hand, the reopening of all economies, including China, and the relaxation of global travel restrictions have boosted global demand. But there are headwinds, possibly cyclical, to global growth. These include an obdurately persistent cost-of-living crisis, tightening financial conditions and job markets in major economies, the entrenched Russia-Ukraine conflict, continuing geopolitical tensions in the world broadly bifurcated by Sino-US tensions, dampening the global outlook. The second quarter one-year-ahead inflation expectations continue to be higher than the average one-year-ahead headline inflation expectations of 3.3% since the inception of this index between 2012 and 2022.
• As a comparison benchmark, data from the Monetary Authority of Singapore Survey of Professional Forecasters (MAS SPF) released in June 2023 showed that the median forecasts of Consumer Price Index-All Items (CPI-All Items) inflation for 2023 was 5%, and the MAS Core inflation was 4.1%. This is in contrast to the figures of 3% and 4.1% for 2024, respectively. The latest CPI data release from the Department of Statistics showed that CPI-All Items rose by 5.8% in January-May 2023 period, compared with the same period in 2022, with the latest May 2023 monthly inflation print coming in at 5.1% year on year. On 14 April 2023, MAS maintained the rate of appreciation of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) policy band, following five consecutive tightening moves between October 2021 and October 2022. These moves have already tempered the momentum of inflation and their impact is still working through the economy. The current appreciating path of the S$NEER policy band will continue to reduce imported inflation and help curb domestic cost pressures.
• The overall Consumer Price Index (CPI) Inflation Expectations (CPIEx), after adjusting for potential component-wise behavioural biases and re-combining across components, inched up to 5.8% in June 2023 from 5.2% in March 2023. The One-year-ahead Inflation expectations of major components of CPI like Food (from 6%-7%), Transportation (from 5%-6%), Housing and Utilities (from 5%-6%) increased slightly while all other components, namely Healthcare, Education, Recreation & Culture, Clothes and Footwear, Household Durables and Services, Communications and Miscellaneous items including personal care, remained steady at 5% between the March 2023 and June 2023 surveys. Higher demand related to travel, food and beverage and accommodation without a commensurate increase in supply might have contributed to the slight increase in some inflation expectations.
• We also polled free response overall inflation expectations after accommodating for potential behavioural biases, and these remained unchanged at 5% between the surveys of March 2023 and June 2023. These free response polls help us to gauge perceptions of anchoring of inflation expectations and consumer sentiments in an aggregate sense.
• In the June 2023 wave, continuing from June 2022 survey, we took a more forward-looking approach to analyse the impact of global economic developments on Singapore’s economic growth and inflation. The findings are:

  • Overall, given the geopolitical unrest and uncertainty, financial sector volatility, continuation of tightening – albeit at a slower pace – of monetary policies by major economies, tight domestic job market and general cost-of-living pressures, Singaporean consumers expect Singapore’s economic growth to dampen slightly over the next 12 months.

  • Responding to overall cost impact on their pocketbook, Singaporean consumers also felt that their overall expenses would increase slightly over the next 12 months.

  • In June 2023, Singaporean consumers polled on how they feel the overall inflation scenario would unfold in the next 12 months seem to hold quite a divergent view. Around 51%, compared to 50% in March 2023, of those surveyed in June 2023 expect inflation to decline. On the other hand, 43% surveyed in June 2023, compared to 41% in March 2023, felt that it will increase.

  • The main reason cited by those expecting inflation to decline is a slowdown in global growth (41%). Central banks in major economies raising interest rates (40%) is given as the second most common reason cited. A distant third, 13% felt the resolution of pandemic-induced supply chain disruptions are also expected to relieve price pressures. Among respondents expecting inflation to increase over the next 12 months, the most common reasons cited were central banks in major economies raising interest rates (27%), followed by geopolitical uncertainties due to the Ukraine-Russia conflict (26%), supply chain disruptions (21%) and high demand due to easing of COVID-19 restrictions (20%).

  • In the June 2023 survey, current economic conditions have a limited negative impact on one-year-ahead and five-year-ahead overall inflation expectations on the views of the respondents. This slight negative impact expecting slightly increased inflation expectations was polled across components like Food, transportation, housing and utilities, and healthcare but there was no such discernible impact on education, recreation and culture, communications, clothes and footwear, household durables and services, and miscellaneous items including personal effects.

  • There was however some significant divergence among respondents regarding the impact on inflation expectations for most components, including Food, Transportation, Housing & utilities, Healthcare, Clothes & footwear, Household durables & services, Miscellaneous items including personal effects besides overall one-year and five-year ahead inflation expectations. We find distinct “bimodal” distributions, where there are two large groups who disagree whether the impact would be positive or negative, demonstrating a perception difference due to the global economic uncertainty.

• Alberto Cavallo of Harvard Business School (Cavallo, 2020) and a report by the European Central Bank (Kouvavas et al., 2020) highlighted potential biases in CPI calculations with fixed baskets as respondents made substantive changes to their consumption baskets owing mainly to the pandemic. In the June 2023 survey, respondents expected to have limited increases in expenses for Food, Transportation, Housing & Utilities, Healthcare but no discernible changes in the other CPI components including Education, Recreation and Culture, Communication, Clothes and Footwear, Household durables and Services and Miscellaneous Personal Effects. These results indicate that respondents expect the consumption baskets to change, with higher spending on certain components over the next 12 months compared to other components, owing to possibly more permanent consumption changes post-pandemic relative to consumption and price patterns across the board.

• Excluding inflation expectations in accommodation and private transportation, the One-year-Ahead CPIEx core inflation expectations for this SInDEx survey in June 2023 remained unchanged at 4.8% compared to March 2023 survey. This is an early indication of prices stabilising and anchoring of inflation expectations without the more volatile and policy sensitive components.
• For a subgroup of the population who owns their accommodation and uses public transport, the One-year-Ahead CPIEx core inflation expectations elevated to 4.9% in June 2023 from 4.7% in March 2023, but the pace of increase in expectations remained broadly on a moderating path compared to the highs in 2021-22. This sub-sample measurement is potentially more representative than the full sample measurement, due to high home ownership and public transport ridership in Singapore.
• Unlike the fixed response which might be susceptible to various behavioural biases, core CPIEx Inflation Expectations (excluding accommodation and private road transportation expenses), after adjusting for potential component-wise behavioural biases and re-combining across components, increased to 5.8% in June 2023 from 5.3% in March 2023 survey. The free response core CPIEx Inflation Expectations however stayed unchanged at 5% in June 2023 compared to March 2023 survey, corroborating the early slowing trend in inflation expectations.

• The One-year-Ahead composite index SInDEx1 that puts less weight on more volatile components like accommodation, private road transport, food and energy-related expenses polled at 4.8% in June 2023, inching up slightly from 4.7% in March 2023. It nonetheless continues to be higher than the second quarter average of 3.3% since the survey’s inception from 2012 till 2022.

• In addition, in June 2023, around 11.2% of Singaporeans polled expect a salary reduction of more than 5.0% in the next 12 months compared to 9.8% of respondents in March 2023. The expectation of a median salary increment of between 1% and 5% remained unchanged compared to the March 2023 survey.

Figure 1: One-year-Ahead inflation expectations: The chart shows the quarterly DBS-SKBI CPIEx (CPI-All Item) and DBS-SKBI CPIEx Core (Excluding accommodation and private road transportation components) One-Year-Ahead Inflation Expectations polled in the quarterly online Singapore Index of Inflation Expectations (SInDEx) Survey conducted on a representative sample of Singaporean residents between 19 June and27 June 2023. (Source: SKBI, SMU, MAS, Department of Statistics)

 

DBS Chief Economist and Managing Director of Group Research, Dr Taimur Baig, commented, “After nearly two years of inflation dominating the macro landscape, the global price picture has finally become somewhat benign. Commodity prices have softened, food inflation is moderate, electronics prices are correcting due to demand contraction, and companies are beginning to scale back price increase strategies. Singapore’s consumers will be seeing these developments reflected in their pocketbooks during the second half of this year, which would be a source of relief after a few years of relentless inflation. As such developments take hold, inflation expectations would adjust as well, particularly in the presence of lacklustre demand outlook in the region.”

SMU Assistant Professor of Finance and Founding Principal Investigator of the Quarterly DBS-SKBI SInDEx Project, Aurobindo Ghosh, highlighted, “The World Bank Group summarised the ‘precarious’ state of the global economy in its June 2023 Global Economic Prospects citing overlapping economic shocks. These are precipitated by the ongoing geopolitical conflicts and tensions, tightening of monetary policy to contain runaway inflation, restrictive credit conditions due to recent banking sector stress, with warnings of slowdown in global growth in 2023 and a lingering weakness in 2024. A small open trade-based economy like Singapore is susceptible to these global headwinds and has to walk a fine line between controlling cost of living and catalysing growth.”

He added that domestically, ongoing, and planned increases in GST and other pass-through costs like transportation, rental and higher wages due to a tighter labour market, besides the slowdown in the growth of major trading partners like China, might also dampen Singapore demand. He observed: “Singaporean consumers, being aware of these challenges, seem to believe that there would be some tempering of the trend of inflation, particularly in areas without the more volatile policy-sensitive elements like transportation and housing, indicating some initial signs of anchoring of medium-term inflation expectations despite the global uncertainty.”

The DBS-SKBI SInDEx Inflation Expectations survey, he shared, is designed to be robust in monitoring expectations of inflation.

He said: “Recent academic literature has highlighted certain behavioural biases creep into responses of those who are exposed to more volatile grocery and gasoline prices when asked about subjective inflation expectations (Weber et al., 2022). However, it has been established that survey-based inflation expectations of professionals, households and consumers are instrumental in forecasting future inflation (Ang et al., 2007).”

Since 2018, the survey has accommodated some of the behavioural biases by cross referencing multiple choice based and free response options.

He noted that opinions seem to show a clear dichotomy, with one group expecting inflation to pare down while other expecting inflation rate to rise. “This can be reconciled, as it is also well known that any monetary policy tightening takes effect over a period of time, so we have to investigate the gradual changes to trends in inflation expectations to measure the effectiveness or anchoring of inflation expectation in a small open economy like Singapore that runs an exchange rate based monetary policy,” Dr Ghosh observed.

For the longer horizon, the Five-year-Ahead CPIEx inflation expectations rose slightly to 5.3% in June 2023 from 5.2% in March 2023. The current polled number continues to be higher than the first quarter average of 4.1% since the survey’s inception in 2012.

The Five-year-Ahead CPIEx core inflation expectations (excluding accommodation and private road transportation related costs) however remained unchanged at 5.2% in June 2023 compared to March 2023. Overall, the composite Five-year-Ahead SInDEx5 also increased slightly to 5.3% in June 2023 from 5.2% in March 2023. In comparison, the first quarter average value (since the survey’s inception in 2012 till 2022) of the composite Five-year-Ahead SInDEx5 is 4.0%.

After adjusting for potential behavioural biases, the free response Five-Year-Ahead Headline Inflation Expectations increased to 7% in June 2023 compared to 5% March 2023, while the free response Core Five-Year-Ahead Inflation Expectations also increased to 7% in June 2023 from 6% in March 2023. This might be reflecting some dampening of consumer confidence due to concern over cost-of-living increases.

“Slowdown or flattening in the trend of medium- and long-term inflation expectations bodes well for both consumer confidence as well as impact of global economic uncertainty on cost of living. Policymakers around the world seem to be studying data to finetune their policy stance and be cautiously optimistic about early signs of slowing inflation to avoid precipitating a ‘hard-landing’ of economic recession,” Asst Prof Ghosh commented.

References:

Ang, A., G. Bekaert, and M. Wei., 2007, “Do Macro Variables, Asset Markets, or Surveys Forecast Inflation Better?” Journal of Monetary Economics, 54:4, pp. 1163–212.

Cavallo, A., 2020, "Inflation with COVID Consumption Baskets." NBER Working Paper Series, No. 27352, June 2020 (Harvard Business School Working Paper, No. 20-124, May 2020). (https://www.hbs.edu/faculty/Pages/item.aspx?num=58253, accessed on July 14, 2020)

Kouvavas, O., R. Trezzi, M. Eiglsperger, B. Goldhammer and E. Goncalves, 2020, “Consumption patterns and inflation measurement issues during the COVID-19 pandemic,” ECB Economic Bulletin, Issue 7/2020. (https://www.ecb.europa.eu/pub/economic-bulletin/html/eb202007.en.html#toc6, accessed on July 14, 2020)

Weber, M., F. D’Acunto, Y. Gorodnichenko and O. Coibion, 2022, “The Subjective Inflation Expectations of Households and Firms: Measurement, Determinants, and Implications,” Journal of Economic Perspectives, 36:3, pp. 157–184.

Methodology

DBS-SKBI SInDEx survey yields CPIEx Inflation Expectations (estimating headline inflation expectations) and related indices are products of the online quarterly survey of around 500 randomly selected individuals representing a cross section of Singaporean households. The survey is led by Principal Investigator Dr. Aurobindo Ghosh, Assistant Professor of Finance (Education) at Lee Kong Chian School of Business, SMU. The online survey, powered by Agility Research and Strategy, helps researchers understand the behavior and sentiments of decision makers in Singaporean households. DBS Group Research is a co-sponsor and research partner with the Sim Kee Boon Institute for Financial Economics (SKBI) at SMU.

The quarterly DBS-SKBI SInDEx survey has also yielded two composite indices, SInDEx1 and SInDEx5. SInDEx1 and SInDEx5 measure the One-year inflation expectations and the Five-year inflation expectations, respectively. The sampling was done using a quota sample over gender, age and residency status to ensure representativeness of the sample. Employees in some sectors like journalism and marketing were excluded as that might have an effect on their responses to questions on consumption behavior and expectations.

The DBS-SKBI SInDEx survey was augmented in June 2018, based on a joint research study conducted by SMU researchers in collaboration with MAS and the Behavioural Insights Team, where respondents were polled on their perceptions of components of the Consumers Price Index (CPI) and adjusted for possible behavioural biases prevalent in online surveys.

Based on the recommendations of the joint study, since March 2019 the research team has polled the One-year-Ahead inflation expectations of all of the major components of CPI-All Items inflation. For June 2023 survey, DBS-SKBI CPIEx headline inflation expectations indices increased compared to March 2023, while the core inflation expectations remained largely unchanged. Further, the behaviourally adjusted component-wise and recombined inflation expectations, causing the overall behaviourally adjusted indices increased slightly though at a slower pace. In free response answers, compared to March 2023 survey, respondents in the June 2023 survey polled One-year-Ahead Headline and Core Inflation Expectations remained unchanged as a positive sign of anchoring. Overall, the results indicate a slowdown in the trend of medium and long inflation expectations.

We introduced a new ratio in the June 2020 survey, on the life versus livelihood debate as an aftermath of the Covid 19 pandemic - the ratio of respondents who feels livelihood should be prioritised over life vis-à-vis those who feel the other way. This ratio increased to 3.6 in June 2023 compared to 3 in March 2023. For every respondent who prioritised life over livelihood, there were about 4 who prioritised livelihood over life, signaling life returning to normal with an endemic Covid-19.

Figure 2: Five-year-Ahead-Inflation Expectations in Singapore: The chart shows the quarterly DBS-SKBI CPIEx (CPI-All Item), DBS-SKBI CPIEx Core (excluding accommodation and private road transportation components), SInDEx (Composite index with lower weights on volatile components like food, energy, accommodation and private road transportation) One-Year and Five-Year-Ahead Inflation Expectations polled online quarterly for the Singapore Index of Inflation Expectations (SInDex) Survey conducted from 19 June to 27  June, 2023. The chart shows a preliminary estimate of Behaviourally Adjusted One-year-Ahead overall DBS-SKBI Adjusted CPIEx. As comparison benchmarks, the chart provides the most recent quarterly CPI-All Item Inflation, MAS Survey of Professional Forecasters median One-year-Ahead CPI-All Item inflation forecasts and the yield spread of 10-year and 1-year Singapore Savings Bonds (SSB). (Source: SKBI, SMU, MAS, Department of Statistics)

 

 

 

About DBS

DBS is a leading financial services group in Asia, with over 280 branches across 18 markets. Headquartered and listed in Singapore, DBS has a growing presence in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.

Recognised for its global leadership, DBS has been named “Best Bank in the World” by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for ten consecutive years from 2009.

DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.

With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. The bank acknowledges the passion, commitment and can-do spirit in all of our 26,000 staff, representing over 40 nationalities. For more information, please visit www.dbs.com.

About Singapore Management University

Established in 2000, Singapore Management University (SMU) is recognised for its disciplinary and multidisciplinary research that address issues of global relevance, impacting business, government, and society. Its distinctive education, incorporating innovative experiential learning, aims to nurture global citizens, entrepreneurs and change agents. With more than 12,000 students, SMU offers a wide range of bachelors, masters and PhD degree programmes in the disciplinary areas associated with six of its eight schools - Accountancy, Business, Economics, Computing, Law and Social Sciences. Its seventh school, the SMU College of Integrative Studies, offers a bachelor’s degree programme in deep, integrative interdisciplinary education. The College of Graduate Research Studies, SMU’s eighth school, enhances integration and interdisciplinarity across the various SMU postgraduate research programmes that will enable our students to gain a holistic learning experience and well-grounded approach to their research. SMU also offers a growing number of executive development and continuing education programmes. Through its city campus, SMU focuses on making meaningful impact on Singapore and beyond through its partnerships with industry, policy makers and academic institutions. For more information, please visit www.smu.edu.sg

About Sim Kee Boon Institute for Financial Economics

The Sim Kee Boon Institute for Financial Economics (SKBI) is the premier Asian institute for applied financial research and training in financial economics. It is the think-tank within SMU that spearheads cutting-edge research in financial markets that is driven by industry and societal needs in Singapore and the region. 

Over the last 10 years, a diverse portfolio of financial research, outreach and training initiatives has been built. In the coming 10 years, while further expanding that traditional financial economics portfolio, the Institute will focus our efforts on the areas of financial inclusion and literacy, sustainable finance, financial technology, and data and governance. To maintain our relevance to finance practitioners and policy-makers, SKBI also adopts a view on Asian and global economic trends.

Supported by SMU faculty and in collaboration and partnership with industry experts, relevant government bodies, and other world-renowned research agencies, the Institute conducts fundamental and applied research which aims at solving real-world issues. Besides research, SKBI also actively engages in outreach, executive training and research dissemination through organising courses, seminars and conferences. Our purpose-oriented activities are designed to bridge the gap between theory and practice and to act as accelerators with regard to financial policies and regulations. SKBI is led by an Advisory Board that consists of prominent leaders of local and international organisations in the finance industry that have footprints across Asia, and of government agencies.

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Singapore Management University’s Sim Kee Boon Institute for Financial Economics (SKBI) together with Landmark Books today launched ‘Sim Kee Boon: The Businessman Bureaucrat’, a biography which brings to life a part of Singapore’s history by tracing the personal journey of the pioneer generation leader, who passed away in 2007.

Read full press release here.