Nearly 9 in 10 Singaporeans expect inflation to rise amid global uncertainty

SINGAPORE: Singaporeans are expecting inflation to edge higher over the coming year, with concerns over geopolitical tensions continuing to shape public sentiment despite a slight decline in the proportion of people anticipating further price increases.

According to the latest DBS-SKBI Singapore Index of Inflation Expectations survey, respondents expect headline inflation to average 3.4% over the next 12 months, up slightly from 3.3% recorded in the previous survey conducted in March.

The survey found that 87.7% of respondents believe inflation will continue to rise over the next year, a marginal decline from 88.3% in March. Just 4.3% expect inflation to ease during the same period.

Among those anticipating higher inflation, geopolitical conflicts and broader global uncertainty emerged as the dominant concern, with nearly six in 10 respondents identifying them as the main driver of future price increases.

Supply chain disruptions were cited by 14.3% of respondents as the primary factor behind their expectations, while 9.4% pointed to uncertainty surrounding trade policies, including tariffs.

Inflation expectations also increased when volatile components such as accommodation and private transport were excluded. Core inflation expectations rose to 3.4%, compared with 3.3% in the March survey.

The findings come after inflation picked up in March, with both headline and core measures rising amid higher costs for private transport, retail goods and services.

Transport registered the largest increase in expected price growth among the major spending categories. Respondents now expect transport-related costs to rise by 3.8% over the next year, up from 3.5% previously.

Expectations for education and household durables both climbed to 3%, while projected inflation for recreation, sport and culture increased to 3% from 2%.

Price expectations for food, housing and utilities remained unchanged at 3%, while healthcare continued to record the highest expected inflation rate among the major categories at 4%.

Meanwhile, the survey’s composite one-year inflation index, which assigns lower weight to more volatile expenditure items such as accommodation, private transport, food and energy, remained unchanged at 3.3%.

The latest edition of the DBS-SKBI Singapore Index of Inflation Expectations was conducted between 22 and 30 June and gathered responses from 536 participants.