Managing inflation expectations is likely to become a sharper focus of policymakers, even as attention this week centres on what Singapore's central bank will do to rein in current price pressures. 'If inflation is expected to be higher in the future, employees may demand higher nominal wages to offset the increasing cost of living and companies may be inclined to increase prices to offset the increasing cost of production,' said Aurobindo Ghosh, programme director at the [SMU] Sim Kee Boon Institute for Financial Economics. Dr Ghosh is co-creator of the Singapore Index of Inflation Expectations (SInDEx), which tracks how the public's perception of prices in Singapore changes.
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