Singaporeans' median inflation expectations slip to 2.63% in June

It’s the lowest level since September 2011.

As far as the average Singaporean household is concerned, an inflation is not on the horizon. Recent figures reveal that medium term median inflation expectations moderated to 2.63%, the lowest level since September 2011.

According to Singapore Management University’s latest figures for Singapore Index of Inflation Expectations (SInDEx), consumers surveyed in June 2016 revealed their views on expectations of inflation-related variables over the medium term (One-year-Ahead) to long term (Five-year-Ahead).

“The results of the June 2016 survey showed that compared to March 2016, the median One-year-Ahead headline inflation (or CPI-All Item inflation) dropped to 2.63% from 2.79% in March 2016, its lowest level since the survey’s inception in September 2011,” SMU revealed.

As a benchmark, the mean mean One-year-Ahead headline inflation rate, moderated down to its new 2.86% trough in the most recent survey compared to 2.94% in the March 2016 survey. This reflects a continuation of its sub-3% value since December last year.

Compared to the historical median headline inflation expectations average of 3.58% and the more recent second quarter average of 2.89%, the current One-year-Ahead median headline inflation has dropped significantly. Representative Singapore households surveyed believe that medium term expected price changes appear to remain on its downward trend.

Singaporeans’ One-year-Ahead median inflation expectations moderated to 2.63%, its lowest level since September 2011, according to the research findings of the latest quarterly survey for Singapore Index of Inflation Expectations (SInDEx) by Singapore Management University (SMU).

Unlike the overall headline inflation, though, the One-year-Ahead median Singapore core inflation expectations—stripping out accommodation and private road transportation related costs—inched up to 3% in June, fro, 2.91% in the preceding month. SMU believes this is in line with the Monetary Authority of Singapore’s policy guidance about slow increase in the core inflation expectations over 2016.

On the other hand, for a subgroup of the population who own their accommodation and use public transport, the One-year-Ahead median Singapore core inflation rate for the subgroup remained close to the 2.9% in the June 2016 survey compared to 2.91% in March 2016, the lowest since June 2013.