Singapore has re-entered the global top 20 most expensive cities in the world in the latest cost of living survey published by ECA International, the world’s leading provider of knowledge, information and software for the management and assignment of employees around the world. Despite rising four places in ECA’s global rankings, Singapore is still ranked lower than it was at its peak in 2016 when it featured at 18th in the ranking.
“The price of goods and services included in our basket of goods has only seen modest increase in Singapore over the past 12 months, in line with other similar economies in Asia,” said Lee Quane, Regional Director – Asia at ECA International. “However, the rise in the rankings has been due to the relative strength of the Singapore dollar versus the US greenback in the past year.”
ECA International has been conducting research into cost of living for over 45 years. It carries out two main cost of living surveys per year to help companies calculate cost of living allowances so that their employees’ spending power is not compromised while on international assignment. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in 475 locations worldwide. Certain living costs, such as accommodation rental, utilities, car purchases and school fees are usually covered by separate allowances. Data for these costs are collected separately and are not included in ECA’s cost of living basket.
Hong Kong saw a significant drop in the rankings, falling from the second most expensive location in the world to 11th – its lowest position since 2015. Quane said, “Hong Kong has seen a significant drop in our cost of living rankings for overseas workers, falling behind locations such as Tokyo, Seoul and Shanghai. The main reason behind the drop is the fall in value of the US dollar against which the Hong Kong dollar is pegged, over the last year.” Exchange rates have been the main cause of movements in the rankings in the past 12 months. “Rates of price increases throughout most of the major locations in Asia researched has been quite low,” explained Quane. “Currency movements, on the other hand, have been quite volatile with several emerging market currencies strengthening against the US dollar in the last year.”
Every one of the Chinese cities included in the survey has seen a rise in the global rankings from last year. Shanghai was the highest placed Chinese city on the list in 10 th place overall. Quane said, “There has been a major rebound for the Chinese cities in our latest Cost of Living survey. Last year we reported that Chinese locations had all dropped in the rankings but 12 months later the long-term upward trend has resumed, and they have risen significantly. However, the stronger yuan pushed all locations up in our rankings, with Shanghai overtaking Hong Kong.” Tokyo is now the most expensive place in Asia for foreigners to live and work, at Hong Kong’s expense. It has been a similar theme in Seoul, which is also now above Hong Kong in the rankings, despite remaining in eighth place globally,” explained Quane.
Meanwhile, locations in both Malaysia and Thailand have risen in ECA’s rankings, with Bangkok entering the global top 100 for the first time. Quane said: “Once again prices increased at a relatively low rate, in both countries. In the case of Malaysia, especially in Kuala Lumpur, this shows that the inflationary impact of the imposition of GST seems to have been brought under control. Rather, it is the relative appreciation of each country’s currency that saw Bangkok and Kuala Lumpur rise in our rankings to 99 and 182 respectively.” Chiang Mai also saw a rise and is up to 169 in the global rankings.
Inflation in Venezuela has rocketed over the past year causing a significant rise in the cost of living rankings. Caracas, Venezuela now tops ECA’s list of the most expensive cities in the world, overtaking Hong Kong, all cities in Switzerland and last year’s most expensive location, Luanda. Quane said, “The economic situation in Venezuela has become increasingly volatile with inflation reaching an astounding 7000 percent in the year to March 2018 and 1800 percent over the last six months alone. The cost of goods has increased exponentially as the economic and political situation has deteriorated and despite the plummeting value of the peso, Caracas sits at the top of our Cost of Living rankings.”
In Europe, rankings have largely gone up, with locations such as Rome, Paris and Dublin rising by over 40 places each. Quane said, “The euro has performed significantly better over the past twelve months compared to the previous year, so we have seen living costs increase in a number of European nations. Cities such as Rome and Brussels have risen by over 50 places.” Swiss cities continue to dominate the top of the rankings – with four locations remaining in the global top ten.
ECA International’s main cost of living surveys are carried out in March and September using a basket of day-to-day goods and services commonly purchased by assignees. The data used above refers to year-on-year movements between ECA’s March 2013 to 2018 surveys. ECA’s cost of living survey rankings began in 2004. Although ECA International undertakes research of the cost of living in over 475 locations, within our Cost of Living rankings we look at approximately 260 locations. Cost of living indices are used by ECA’s clients to calculate cost of living allowances for assignees. The survey covers: • Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables • Basic: Household goods; recreational goods; general services; leisure services • General: Clothing; electrical goods; motoring; meals out; alcohol and tobacco Certain living costs such as accommodation rental, utilities charges (electricity, gas, and water), car purchases and school fees are not included in the survey.