Based on the findings of the Economist Intelligence Unit’s (EIU) Worldwide Cost of Living 2020 report that was released on Wednesday (18 March), Singapore once more maintained the top spot for the seventh consecutive year as the world’s most expensive city for expatriates, alongside Osaka and Hong Kong.
Nonetheless, the gap between Singapore and other cities has been narrowed.
New York and Osaka are the base city for comparison, as Singapore was 2 per cent more expensive than New York but equally expensive with Osaka in 2020. But in 2019, Singapore was 6 per cent more expensive than Osaka and 7 per cent more expensive than New York.
“While there was upward pressure in Singapore this year because of rising electricity costs and the strong currency, this was offset by flat or cheaper prices for other goods, such as restaurant meals and supermarket staples,” Simon Baptist, Global Chief Economist at the EIU, told The Business Times.
The average price of one-kilogramme loaf of bread in Singapore this year dropped to US$3.35 (S$4.79) from US$3.40 (S$4.86) in 2019. In addition, the average price of a bottle of beer fell to US$2.25 (S$3.21) in this year to US$2.37 (S$3.39) in 2019.
Also the average price of women’s haircut remained steady at US$96.01 (S$137.14), whereas the average price of men’s two-piece business suit was also steady at US$1,167.14 (S$1667.11).
Of the 133 cities surveyed, the survey highlighted that the cost of living dropped about 4 per cent on a global level. This can be attributed to the strength of the US economy, the uncertainty of surrounding US-China trade friction, as well as the impact on global currencies from monetary easing.
Mr Baptist added that because Singapore dollar has been “relatively strong” in comparison to other currencies like the Euro, Australian dollar, and Chinese yuan, the cities of these currencies became relatively less expensive than Singapore.
The Singapore dollar was faintly weaker than the US dollar in 2019, which entailed that Singapore became slightly less expensive than the cities in the US.
According to the survey, Asia is the continent with the most varied cost of living. Even though the top ranking cities are those from the Asian business centres, the 10 least expensive cities are also made up of other cities in Asia.
Among the bottom 10 least expensive cities, four of which are cities in Pakistan and India.
South Asia is still “structurally cheap” despite the regions’ fast-growing economies and rapid population growth. The survey suggested that high levels of income inequality and low wages are the reasons behind this. As a result, potential price increases are curbed due to the limited strong retail competition and household spending.
The Economist Intelligence Unit’s (EIU) Worldwide Cost of Living survey is conducted twice a year to compare more than 400 individual prices across 160 products and services. More than 50,000 individual prices are collected over a range of stores such as high-priced specialty stores, mid-priced stores, and supermarkets.