Singapore is now the 16th most expensive countries to live in the world for expatriates, rising from 18th place last year, according to the latest Cost of Living Survey conducted by ECA International.
ECA states that to ensure that an employee’s spending power is maintained when they are sent on international assignment, a cost of living allowance is often provided as part of the pay package. This allowance will be affected by differences in inflation levels as well as exchange rate movements between the employee’s home and host countries.
It noted that the Singapore dollar has appreciated against most major currencies in the months leading up to its survey.
Lee Quane, ECA International’s Regional Director in Asia, noted that despite low price rises, the impact of the stronger currency means that where companies provide cost of living allowances to their international executives assigned to Singapore, these will likely need to be raised to ensure that employee purchasing power is maintained.
“Over the past five years, Singapore has continued to rise in the ECA global rankings from 33rd in 2011, up 17 places to 16th in 2016,” he added.
The report also said that Malaysian locations have also risen in the global rankings with Kuala Lumpur climbing 14 places to 192nd position in the global ranking.
In Asia Pacific regional, Singapore ranks the ninth most expensive location. While, the first and second countries are Tokyo and Yokohama respectively.
ECA International has been conducting research into cost of living for more than 40 years and provides data on cost of living, salary, accommodation, tax, labour law, benefits and quality of life for international assignees in about 400 locations worldwide. It carries out two main 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 over 450 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.
Cost of living indices is used by ECA 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.
In another finding by Economist Intelligence Unit (EIU) this March, Singapore was named the most expensive place in the world to buy and run a car, thanks to Singapore’s complex Certificate of Entitlement system. Transport costs in Singapore are 2.7 times higher than in New York. Alongside Seoul, Singapore is also a very expensive city in which to buy clothes and pay for utility costs.