Singaporeans are wary of interest rate hikes.
Singaporeans’ median inflation expectations for the next year has dropped to its lowest level on record, according to the latest quarterly Singapore Index of Inflation Expectations (SInDEx) by Singapore Management University (SMU).
The results of the December 2015 survey showed that median inflation expectations for the next year has declined to 2.74%, compared to 2.92% in September.
Compared to the historical median headline inflation expectations average of 3.69% and the more recent fourth quarter average of 2.99%, the current one-year-ahead median headline inflation is significantly lower.
The steep drop was attributed to the US Federal Reserve’s interest rate lift-off slowing global growth, persistently low oil prices and the Chinese equity market turmoil.
“The inflations expectations 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,” said the survey.
Over the longer-term, Singaporeans’ five-year inflation expectations dropped to 3.65% from 3.73% in September.
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