TRENDS ECA INTERNATIONAL EXPATRIATION
Singapore - With the increasing cost of living in Singapore, companies employing international assignees are likely to be shelling out larger employee allowances here.
The latest Cost of Living survey, conducted by ECA International over 390 locations worldwide, saw Singapore moving up from the 12th to 9th position in the Asian Cost of Living ranking over the past 12 months.
Globally, the country has rose from 97th to its current 78th position. This is largely a result of the strength of the Singapore dollar.
In fact, the cost of living for foreigners Singapore is catching up with the levels of some of its neighbours. While living costs in Singapore were approximately 15% lower than in Hong Kong a year ago, the difference now is only 7%.
"While such increases are unlikely to deter companies from relocating staff to Singapore, the cost of doing so is now higher than it was a year ago," says Lee Quane, regional director of Asia for ECA International. "The stronger currency, together with the fact that inflation has been slightly higher here than in a number of other locations in Asia means that companies employing international assignees are likely to be paying higher cost of living allowances to ensure that their employees continue to maintain their purchasing power while on assignment."
In Asia, the four most expensive locations are Japanese cities, with Tokyo maintaining its position as the most expensive location in Asia for international assignees as the stronger yen outweighs the impact of deflation in the Japanese capital. Yokohama, Nagoya and Kobe, follow in 2nd, 3rd and 4th place respectively. Hong Kong follows in 5th place, then by Shanghai (6th) which is China's most costly location for assignees.
On the other hand, Xi'an, the cheapest city surveyed in greater China, is ranked 115 places below Shanghai in the world ranking.
"The massive gap between Shanghai and the cheapest location surveyed in China underlines the huge variation in living costs in this large region," says Quane. "In recent years we have seen many mainland Chinese cities rise up our ranking. Now, with the value of the renminbi changing very little over the past year as the country combats the effects of the global recession, together with a slowing in the pace of inflation, the brakes have been put on this."
Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignees' remuneration packages.
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