MULTIPLE challenges seen in the global world economy have driven expectations of inflation here to their lowest ever, with the median expectations for prices surveyed in the fourth quarter of 2015 for the year ahead coming in at 2.74 per cent.
This is significantly lower than the 2.92 per cent registered in the third quarter of 2015. It is also 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.
Median expectations for core inflation, which excludes accommodation and private transportation costs, also hit their lowest levels ever, coming in at 2.85 per cent in December 2015.
These findings were published in a Singapore Index of Inflation Expectations (SInDEx) survey by Singapore Management University (SMU) on Monday morning.
"The slowing down of four of the five BRICS (Brazil, Russia, India, China, South Africa) countries exacerbated by the turmoil in Chinese equity market and continued weakness in global demand led the World Bank group to moderate the world growth forecast downwards to 2.9 per cent in its 2016 Global Economic Prospects," noted SMU.
Coupled with low oil and commodity prices, they have forced inflation expectations to plummet to their lowest level since the survey's inception in September 2011.
The SInDEx is derived from an online survey of around 500 randomly selected individuals representing a cross section of Singapore households. The online survey helps researchers understand the behaviour and sentiments of decision makers in Singapore households.