According to the latest Singapore Index of Inflation Expectations (SInDEx) by SMU, Singapore's inflation expectations have plummeted to their lowest levels in three years, due to sliding oil prices and shaky global growth. Coupled with an anticipated increase in benchmark interest rates, consumers polled in December now expect overall inflation to stand at 3.53 per cent this year. Still, the latest 3.53 per cent figure is higher than the official headline inflation forecast of 0.5-1.5 per cent in 2015. Explaining the divergence, Programme Director of the Sim Kee Boon Institute for Financial Economics at SMU and Assistant Professor of Finance Aurobindo Ghosh, who co-created the SInDEx, said: "For survey-based instruments that are used for measuring inflation expectations, like SInDEx, there is less impact of base effects, unlike activity based measures like headline inflation. Therefore, even though there is a significant drop in expectations of inflation among Singapore households, those expectations are still higher than the actual numbers that are observed based on economic data."