44% of Singaporeans expect inflation to increase within the next 12 months

The Singapore Index of Inflation Expectations Survey (SinDEx) by DBS and the Singapore Management University (SMU) highlighted a noticeable shift in the expectations of Singaporeans regarding inflation in the coming year.

The survey indicates that an increasing number of Singaporeans anticipate inflation to rise within the next 12 months. In September, 44% of respondents expressed this expectation, up from 43% in June.

Conversely, the percentage of Singaporeans who believe inflation will decrease has declined, moving from 51% in June to 49.5% in September.

More from OMY: Inflation to ease further in the second half of 2023

Among those who anticipate inflation to increase, the majority pointed to central banks in major economies raising interest rates (31%) as a significant contributing factor. Other factors cited by Singaporeans include the Ukraine-Russia conflict (26%), heightened demand due to the relaxation of COVID-19 restrictions (21%), and supply chain disruptions (14%).

On the other hand, Singaporeans who believe that inflation will decrease attribute it to higher interest rates (41%), a slowdown in global economic growth (36%), and the resolution of pandemic-induced supply chain disruptions (16.5%) which are expected to alleviate pricing pressures.

The survey has observed that Singaporeans’ one-year-ahead inflation expectations decreased to 4.5% in September from 4.9% recorded in June.

The future outlook for 2024 includes milder price increases in various sectors. Notably, food price expectations have reduced from 7% to 5%, transportation from 6% to 5%, and housing and utilities from 6% to 5%.

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