Inflation 'expected to slide for year ahead'

SMU’s Singapore Index of Inflation Expectations (SInDEx), which surveyed a sample of 500 individuals online in March this year, showed that consumers now expect a headline inflation rate of 3.05 per cent for the year ahead, down from the previous survey’s 3.52 per cent in December last year. This is the lowest rate recorded since the SInDEx was first started by the SMU Sim Kee Boon Institute for Financial Economics in September 2011. SMU said that despite a tight labour market and consequent pass-through costs, those polled “perceive that overall prices from imported inflation have moderated enough” to warrant lower inflation expectations. SMU Assistant Professor of Finance (Education) Aurobindo Ghosh, who co-created SInDEx, noted: “Domestic factors such as the impending supply glut in COE quota and upcoming additional supply of accommodation, lower than expected pass-through costs despite tight labour market and medical subsidies have brought down inflation expectations.”