Singapore's inflation expectations slip to 3.23% in Sept: SMU survey

INFLATION expectations in Singapore have slipped to 3.23 per cent - lower than the historical inflation expectations average of 3.94 per cent, said the Singapore Management University (SMU) on Monday.

Singaporeans polled in September were swayed by weak global growth prospects, which drove inflation expectations below their earlier one-year inflation expectation of 3.35 per cent recorded in June.

Said SMU in a press release: "Prolonged slump in global oil prices owing partly to oversupply and sluggish demand, as well as continued weakness in commodity prices, have had deleterious effects on global growth prospects.

"Exacerbating the global factors which is resulting in benign and almost negligible imported inflation, domestic factors such as continued decline in private transportation cost due to an impending supply boost in Certificates of Entitlement (COEs) and additional supply of accommodation in the medium term might have also contributed in dragging the inflation expectations downwards."

The latest quarterly online poll of around 500 consumers also found that the public now expects a lower rate of core inflation, which excludes accommodation and private transport costs.

Expectations for core inflation in the year ahead have dropped to 3.31 per cent in September - from 3.5 per cent in June - its lowest level recorded since SMU's Singapore Index of Inflation Expectations (SInDEx) survey started in 2011.

Singapore's inflation rate for September will be released on Oct 23.