Singapore consumers expect lower inflation for year ahead

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.