According to the latest findings from the 56th round of the DBS-SKBI Singapore Index of Inflation Expectations (SInDEx) Survey, conducted by the Sim Kee Boon Institute for Financial Economics at Singapore Management University, inflation expectations among Singaporeans have decreased to the lowest level since December 2021.
Decline in Inflation Expectations
In June 2025, the one-year-ahead headline inflation expectations declined to 3.5%, down from 3.8% reported in March 2025. This decrease suggests a slight moderation in consumer expectations, which had remained stable since June 2024. The latest inflation expectations from the second quarter were marginally above the historical average of 3.4% recorded for the second quarter since the index’s introduction in Q3 2011.
Consumer Price Index Forecasts
Additionally, data from the Monetary Authority of Singapore (MAS) Survey of Professional Forecasters indicated a median forecast of the Consumer Price Index (CPI) for 2025 at 0.9% and a projection of 1.5% for 2026. The most recent CPI figures released by the Department of Statistics showed a 0.9% increase between January and May 2025 compared to the same period in 2024, with an annual inflation rate for May 2025 reported at 0.8%. The MAS’s updated monetary policy statements included a slight reduction in the rate of appreciation of the Singapore Dollar Nominal Effective Exchange Rate.
Aggregated Consumer Price Index Inflation Expectations
Overall, aggregated Consumer Price Index Inflation Expectations saw a minor decline to 4.9%, down from the previous 5% recorded in March 2025. Most major CPI components either remained stable or experienced slight reductions in expectations, particularly in the categories of Recreation, Sport & Culture and Clothing & Footwear. This trend indicates a stabilizing outlook despite ongoing geopolitical and trade-related uncertainties.
Survey Insights and Medium-Term Predictions
The survey’s free-response section noted a moderation in one-year-ahead headline inflation expectations to 4.5%, down from 5% in March 2025. A majority of respondents, approximately 50.3%, anticipated a downward trend in inflation for the medium term, while 42.4% projected an increase.
Influencing Factors
Key factors influencing these expectations include perceived impacts from global growth slowdowns, uncertainties related to trade policies, and high demand attributed to geopolitical tensions. Notably, nearly one-third of respondents indicated that they expected inflation to decline due to these global dynamics.
Long-Term Consumer Price Index Expectations
Looking ahead, the survey also indicated expectations for an increase in the Consumer Price Index over the next five years, with core inflation expectations adjusting to 4.2%, down from 4.5% in March 2025.
Conclusion
This data highlights ongoing shifts in consumer sentiment amidst a changing global economic environment, influenced by factors ranging from trade negotiations to local cost-of-living adjustments.
(Source: SMU News)
