According to the research findings of the latest quarterly survey for Singapore Index of Inflation Expectations (SInDEx) by the Sim Kee Boon Institute for Financial Economics (SKBI) at SMU, the median One-year-Ahead headline inflation in March 2017 increased to 3.38% from 2.7% recorded in December 2016. As a comparison benchmark, the mean One-year-Ahead headline inflation rate, also moved up to 3.86% in the March 2017 survey compared to 2.95% in its December 2016 survey, breaking its sub 3% value for the first time since December 2015.

SMU Assistant Professor of Finance Aurobindo Ghosh, who is the Principal Investigator of the SInDEx Project highlighted, “The level of geopolitical uncertainty arising from inward looking populist and protectionist policies and its impact on the current global capital market is simply phenomenal. Nevertheless, the global economy is projected to grow at a more respectable rate according to the recently released World Economic Outlook in April 2017. He also noted that the sharp increase in the expected level in the headline inflation rate might be due to several factors, both international and domestic, such as an uptick in global growth, trade or pass through costs arising from an increase in domestic salaries or transport costs. Assistant Prof Ghosh added that market sentiments and standard behavioural biases like frequency bias prompts people to overweight daily necessities like food and staples compared to bigger ticket but less frequently purchased items like cars or houses.