SINGAPORE - Singaporeans are expecting inflation to remain low this year amid a slowing down of the economies of emerging nations, turmoil in the Chinese equity market and a 12-year low in oil prices.
Their expectations for headline inflation (or CPI-all item inflation) in the year ahead has fallen to 2.74 per cent in December, lower than the 2.92 per cent expected in September, according to the latest quarterly Singapore Index of Inflation Expectations (SInDEx) survey by Singapore Management University (SMU).
This is also significantly lower than the historical median headline inflation expectations average of 3.69 per cent, and the more recent fourth quarter average of 2.99 per cent.
The latest figures show that inflation expectations here have plummeted to the lowest level since the survey began in Sep 2011, SMU revealed.
Meanwhile, expectations for core inflation, which excludes accommodation and private transportation-related costs, have also fallen to their lowest level since 2011 at 2.85 per cent.
SMU noted that the numbers "show that Singapore households are probably expecting weaker prospects of the global growth and domestic price pressures, and consequently expect overall inflation will be subdued".
Assistant Professor Aurobindo Ghosh, who is the principal investigator for the survey, also observed that overall inflation outlook has dropped due to the impact of lower rental prices and lower COE prices.
Inflation expectations for the longer-term have also fallen, with the five-year-ahead median headline inflation expections in Dec 2015 declining to 3.65 per cent from 3.73 per cent in Sep 2015.
The SInDEx is derived from an online survey of around 500 randomly selected individuals representing a cross section of households in Singapore.