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Singapore no longer tops list of world’s most expensive cities following COVID-19 pandemic impact

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Findings from the Economist Intelligence Unit (EIU)’s 2020 Worldwide Cost of Living survey revealed that Singapore no longer tops the list of the world’s most expensive cities for expatriates.

Singapore occupying fourth place in the survey this year marks the first time in seven years in which the city-state did not rank first place in the EIU Worldwide Cost of Living survey.

The new rankings, published on Wednesday (Nov 18), saw the city of Zurich in Switzerland listed as the world’s most expensive city for expatriates to live in.

Zurich tied with France’s capital Paris as well as with Hong Kong.

Israel’s Tel Aviv ranked one place below Singapore in the survey, sharing the fifth spot with Japan’s Osaka.

Singapore’s place reportedly fell due to factors such as the mass exit of migrant workers linked to effects of the COVID-19 pandemic, an overall decrease in population for the first time since 2003, and falling demand in addition to deflation.

Compared to Zurich and Paris, the cost of living in Singapore had decreased, the EIU survey found.

The rise of Zurich and Paris in the survey, on the other hand, is attributed to a strengthened Swiss Franc and Euro against the United States Dollar.

The survey compares the cost of living across 133 cities globally using 10 categories of nearly 140 consumer goods and services, as well as how the COVID-19 pandemic has impacted the prices of such goods and services.

Other factors cited in the change in rankings include supply chain issues leading to shortages of certain goods such as pasta and toilet rolls and subsequent price hikes, global decrease in wages resulting in less consumer spending, and government policies such as price controls.

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Economics

Thailand’s household debt reaches record high amid slow economic growth

Thailand’s household debt has surged to a record 606,378 baht per household, driven by slow economic growth and high living costs. A UTCC survey found 71.6% of households struggle to meet repayments. The government is working on measures to alleviate the burden.

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Thailand’s household debt has soared to a record high, with many citizens struggling to manage loan repayments due to weak economic growth, declining incomes, and rising living costs, according to a recent survey.

The study, conducted by the University of the Thai Chamber of Commerce (UTCC) in early September, revealed an average household debt of 606,378 baht (S$23,600), marking an 8.4% increase from the previous year. This is the highest level of household debt recorded since the survey began in 2009.

The survey highlighted that 69.9% of this debt is attributed to formal lending, a decrease from 80.2% last year, while informal lending has risen to 30%. This shift is largely due to many individuals reaching their borrowing limits from formal financial institutions, forcing them to seek credit from informal sources such as loan sharks.

The study also noted that a significant number of households are facing difficulties meeting their financial obligations, with monthly debt payments averaging 18,787 baht, up from 16,742 baht the previous year. The delinquency rate stands at 71.6%.

The growing household debt is placing pressure on Thailand’s economy, the second largest in Southeast Asia, which is already grappling with high borrowing costs and sluggish exports amid a slow recovery in China, its main trading partner.

Both the government and the Bank of Thailand have raised concerns over the country’s total household debt, which reached 16.4 trillion baht, or 90.8% of gross domestic product (GDP), at the end of March 2024—one of the highest levels in Asia. The central bank has introduced measures aimed at reducing this ratio to 89% by next year.

For comparison, International Monetary Fund (IMF) data from 2022 shows household debt as a percentage of GDP at 67% in Malaysia and 48.6% in Singapore.

The UTCC survey, which polled 1,300 respondents from 1-7 September, found that the majority had experienced challenges repaying debt over the past year and expected to continue facing difficulties in the coming year.

UTCC President Thanavath Phonvichai expressed concern over the long-standing debt problem, stating that household debt is primarily incurred for daily expenses, housing, vehicles, and business operations, and does not necessarily undermine the overall economy. He added that the situation would improve once the domestic economy returns to strong growth.

In response to the debt crisis, the Federation of Thai Industries has reduced its 2024 target for domestic vehicle sales by 200,000 units to 550,000, citing high household debt and stricter lending conditions as key factors reducing demand.

Finance Minister Pichai Chunhavajira emphasized the urgency of addressing household debt and urged the Bank of Thailand to provide more support to retail borrowers. He also mentioned plans to engage with banks to explore further assistance measures for debtors.

Thailand’s newly appointed Prime Minister, Paetongtarn Shinawatra, has pledged to stimulate the economy immediately.

On Monday, the government announced plans to distribute 145 billion baht to state welfare cardholders starting next week.

This is part of a broader “digital wallet” program aimed at providing financial relief to up to 50 million people, although it now appears much of the support will be disbursed in cash.

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AFP

Top rice supplier India bans some exports

India, the world’s largest rice exporter, bans non-basmati white rice exports to ensure domestic availability and tackle rising prices amid global food crises, potentially impacting rice-dependent nations.

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MUMBAI, INDIA —  The world’s biggest rice exporter India has banned some overseas sales of the grain “with immediate effect”, the government said, in a move that could drive international prices even higher.

Rice is a major world food staple and prices on international markets have soared to decade highs as the world grappled with the Covid pandemic, the war in Ukraine and the impact of the El Nino weather phenomenon on production levels.

India would ban exports of non-basmati white rice — which accounts for around a quarter of its total — the consumer affairs and food ministry said.

The move would “ensure adequate availability” and “allay the rise in prices in the domestic market”, it said in a statement late Thursday.

India accounts for more than 40 percent of all global rice shipments, so the decision could “risk exacerbating food insecurity in countries highly dependent on rice imports”, data analytics firm Gro Intelligence said in a note.

Countries expected to be hit by the ban include African nations, Turkey, Syria, and Pakistan — all of them already struggling with high food-price inflation — the firm added.

Global demand saw Indian exports of non-basmati white rice jump 35 percent year-on-year in the second quarter, the ministry said.

The increase came even after the government banned broken rice shipments and imposed a 20 percent export tax on white rice in September.

India exported 10.3 million tonnes of non-basmati white rice last year and Rabobank senior analyst Oscar Tjakra said alternative suppliers did not have spare capacity to fill the gap.

“Typically the major exporters are Thailand, Vietnam, and to some extent Pakistan and the US,” he told AFP. “They won’t have enough supply of rice to replace these.”

Moscow’s cancellation of the Black Sea grain deal that protected Ukrainian exports has already led to wheat prices creeping up, he pointed out.

“Obviously this will add to inflation around the world because rice can be used as a substitute for wheat.”

Rice prices in India rose 14-15 per cent in the year to March and the government “clearly viewed these as red lines from a domestic food security and inflation point of view”, rating agency Crisil’s research director Pushan Sharma said in a note.

India had already curbed exports of wheat and sugar last year to rein in prices.

— AFP

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