The latest quarterly survey for the Singapore Index of Inflation Expectations (SInDEx) from the Sim Kee Boon Institute for Financial Economics at SMU indicated that both medium-and long-term inflation expectations have cooled from three months ago, despite the potential of a trade war between the US and other major economies, particularly China.
The findings were derived from an online survey of about 500 randomly selected individuals representing a cross-section of Singaporean households. Singaporeans’ median headline inflation projection for one year from now stood at 3.11 per cent last month, down from 3.43 per cent in March. "The risk to global free trade with unilateral or retaliatory tariffs imposed pose a clear and present danger to price stability in the globalised economy," said SMU Assistant Professor of Finance Aurobindo Ghosh, who heads the SInDEx project.
The latest quarterly Singapore Index of Inflation Expectations survey conducted by SMU’s Sim Kee Boon Institute for Financial Economics indicated that inflation expectations remained tame as geopolitical uncertainties cool the euphoria from global economic growth. Singaporean households expect the median one-year-ahead headline inflation to inch up to 2.97 per cent from their forecast of 2.93 per cent recorded in September last year.
SMU Assistant Professor of Finance Aurobindo Ghosh, who was also the survey’s principal investigator said, "Global policy uncertainty impacts Singapore inordinately as we are a small open economy. This is especially so for policies that might be detrimental to multilateral trade, including the imposition of higher trade barriers with the ensuing volatile global prices and fluctuating currencies. Having said that, a strong Singapore dollar and global market conditions seem to have kept a lid on unhinged inflation expectations both in the medium and long term."
SMU's online poll of about 500 consumers, randomly selected to represent a cross-section of households, also found that the public now expects core inflation, which excludes accommodation and private transport costs, to rise marginally from the previous survey in September.