Households in Singapore have raised their inflation expectations for the coming year, with the one-year-ahead headline inflation gauge climbing to an average of 3.4% in June, up from 3.3% in March. This increase is attributed to growing global uncertainties, supply chain disruptions, and potential new tariffs, according to a survey conducted by DBS Group Research and Singapore Management University (SMU).
Core inflation expectations, which exclude volatile accommodation and private transportation costs, also rose to 3.4% from 3.3% in the previous quarter. Dr. Taimur Baig, chief economist at DBS, noted that 2026 has seen a rebound in global inflation driven by supply-side constraints in energy products and demand-side pressures from the Artificial Intelligence (AI) cycle.
The survey, which included 536 respondents, found that 87.7% believe inflation will increase over the next year, a slight decrease from 88.3% in March. Among those expecting higher prices, 57.8% cited geopolitical uncertainties, including conflicts involving Hamas, Israel, Ukraine, Russia, and Iran. Supply chain disruptions were mentioned by 14.3%, while 9.4% pointed to higher trade policy uncertainty, such as tariffs. Dr. Baig stated,
The survey results show rising price pressures are noted by consumers, but there are no signs of a disorderly or adverse shift in sentiments with respect to the cost of living.
The rise in inflation expectations could lead to increased volatility in Singapore's financial markets, particularly in sectors sensitive to consumer prices and interest rates. Investors may reassess their positions in equities and bonds amid concerns over potential rate hikes by the Monetary Authority of Singapore. Watch for the upcoming monetary policy meeting scheduled for next month, which could provide further insights into the central bank's response to inflationary pressures.