Singapore retained its ranking as the 13th most expensive city globally for expats, according to global research firm ECA International.
Even as the cost of living gap between the Lion City and its Southeast Asian neighbours widened with Laos, Myanmar, Thailand and Malaysia falling in the rankings, Singapore's ranking was curbed by the weaker Singapore dollar against other major currencies.
Hong Kong remained the world’s most expensive city for foreign workers, with many mainland Chinese cities climbing up the list.
Singapore’s position in ECA’s cost of living rankings remained unchanged in spite of the city experiencing significant price rises in the past twelve months, with housing rental costs, utilities and petrol prices seeing particular growth.
“The fact that Singapore retained its ranking as the 13th most expensive location globally despite higher-than-average inflation of 5%, which was fuelled by rising costs for rents, utilities and petrol, may come as a surprise to some,” said Lee Quane, Regional Director – Asia at ECA International. “This was because the Singapore dollar has weakened against regional currencies, such as the yuan, and the US dollar at the same time, mainly due to a sharp slowdown in manufacturing and exports during the latter part of our survey period."
ECA International carries out two main surveys per year to help companies calculate the cost of living allowances so that their employees' spending power is protected while on an international assignment.
Across Asia, many locations have witnessed above-trend rates of inflation in the past 12 months. The location which has seen the fastest rate of price growth in the past year was Colombo in Sri Lanka, causing it to rise 23 places in ECA’s rankings to 149th globally.
“Supply shortages of some essential items prompted by a lack of foreign currency have resulted in price increases of more than 15% at the time of the survey, when compared to the previous year,” said Quane. “Protests, which arose in response to the higher prices, have led to the resignations of leading government figures, most notably the prime minister of the country.”
Hong Kong prices have risen less in the Special Administrative Region compared to other similar locations worldwide.
“Year-on-year price increases of 3%, as measured by our basket of goods and services, are higher than what we typically see in Hong Kong. However, the hike in prices is lower than the rates in similar cities both within the region and globally,” said Quane. “Rather, it has been the strength of the Hong Kong dollar, which is pegged to the US dollar, in the past year which enabled the city to maintain its position as the most expensive location worldwide as other currencies have weakened.”
Meanwhile, many mainland Chinese cities rose in the rankings, with four cities now included in the 15 most expensive cities globally. Shanghai is also now the third most expensive city in Asia after Hong Kong and Tokyo.
Quane said. “The majority of the mainland Chinese cities in our rankings have higher rates of inflation than what we are used to seeing, but they are still lower than locations elsewhere in Asia. As in the case of Hong Kong, the main reason for their rise in the rankings has been the continued strength of the Chinese yuan against other major currencies, due to China’s relatively strong economic performance during the survey period.”
A similar trend was seen in Taiwan, with all surveyed cities rising in the rankings owing largely to the continued strength of the Taiwan dollar against other currencies.
On the other hand, Japanese locations have all dropped in the latest rankings as the yen weakened due to unexpectedly higher inflation, alongside negative interest rates. Tokyo, in particular, has fallen three places to fifth in our global rankings.
Many of Singapore’s neighbours in Southeast Asia fell in the rankings in the past 12 months. A mix of currency weakness in some locations and relatively low rates of inflation in others have contributed to a widening gulf in living costs in Singapore relative to many of its neighbours.
Most locations within the EU have seen drops in the rankings after an unsteady period for the Euro, with Paris falling out of the global top 30. Cities such as Madrid, Brussels and Rome have fallen in rankings as well.
In Russia, Moscow is down one place to 62nd in the rankings, while St Petersburg maintained its position at 147th.