Consumers expect inflation to continue for another full year

More than a third of Singaporeans expect price hikes to continue past 12 months.

As high inflation continues to aggravate consumers and businesses, 81% of Singaporeans said rising prices will continue in the next 12 months and beyond, according to a DBS Bank study.

Of this percentage, 42% said inflation will prolong for more than 12 months whilst 39% said it will persist in the next 12 months.

“This could suggest respondents are preparing for this to drag on for longer,” DBS said.

The remaining 18% said it will end by the fourth quarter of 2022 and only 1% said high inflation will end by the third quarter of 2022.

In terms of spending behaviour during rising inflation, naturally, 42% of them said they will save more and spend less, 32% will search for cheaper alternatives, 15% will invest in higher returns, 9% will hunt for high-paying jobs or alternative income, and 2% said they will do nothing.

A vast majority, or 99%, of the respondents were well-informed of the high inflation rate, with only 1% saying they are not aware, the study also indicated.

About 45% of the respondents said the inflation was caused by supply chain disruptions, 26% cited geopolitical tensions, 13% said it is the effect of relaxing COVID-19 health rules, 10% pointed to raising of interest rates by the US Federal Reserve, whilst 6% said other reasons.

Over 201 respondents were retrieved in a survey that lasted three days in the week of 23 May 2022, a month after core inflation rose 3.3%.  

Of the respondents, 80% are employed, 7% are self-employed, 6% are retirees, 4% are students, and 3% are homemakers.

READ MORE: 4 in 5 Singaporeans to invest more amidst rising inflation

Inflation to increase ‘by a bigger magnitude’ in coming months: analysts