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Singapore is now ranked the 26th most expensive city in the world for expatriates, five places higher than its 31st ranking last year.
The latest ECA International survey now puts the city-state as more expensive than Hong Kong, Stockholm, and Melbourne in the global rankings, while it sits at ninth place overall in the Asia Pacific rankings.
“Prices in ECA’s Singapore basket of goods and services typically purchased by expatriates increased just over 4% in the past twelve months – up from last year’s 2.7% figure and higher than what we’ve observed in many parts of Europe and the US, for example,” said Lee Quane, regional director for Asia at ECA International.
Seoul has overtaken Tokyo to take the top spot in the Asia Pacific region. Both cities are followed by Shanghai, Beijing, and Yokohama.
Quane clarified the actual impact of Singapore’s rise up the ranks on the spending power of expatriates will depend on whether they are paid in a currency that has weakened or strengthened against the Singapore dollar.
“For example, the dollar strengthened against the euro this year so this, coupled with prices rising in Singapore more rapidly over the same period, means that many Europeans coming to the country will have seen their purchasing power fall.”
Hong Kong in 28th place globally is now below Singapore. Despite prices of items in ECA’s shopping basket for Hong Kong increasing 4.5% in the past year, its position in the region – and globally – has remained relatively steady.
This annual study compares a basket of like-for-like consumer goods and services commonly purchased by expatriate assignees in over 440 locations worldwide.
The report also finds that the price of items in ECA’s shopping basket in China rose faster this year than the last, despite slower growth in the region.
“As the imported goods and brands expatriates are familiar with become more readily available, particularly in the second tier cities, this is also contributing to price rises within our basket since these items are usually more expensive than the local brands.”
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Topping the global ranking for a second year is Caracas, in Venezuela, which has become the world’s most expensive and the cheapest city for expatriates, depending on the exchange rate used.
“Venezuela’s official fixed exchange rate greatly overvalues the bolivar, making Caracas by far the most costly in the world for the second year running for companies paying expatriates on that basis,” explained the report. “However, expatriates now have access to the much fairer and better value Sicad 2 rate, introduced to enable a more regular supply of US dollars to importers at an exchange rate much closer to the black-market rate.
“When this rate is applied the cost of items in ECA’s basket of goods and services plummets and Caracas becomes the cheapest city in the world for expatriates.”
In second place is Luanda in Angola, followed by Norway’s Oslo. Switzerland, however, dominates the top 10, featuring Zurich, Geneva, Bern, and Basel as some of the world’s most expensive locations for expatriates.
Meanwhile, Malaysian locations have risen notably, with Kuala Lumpur climbing 29 places to 176th position in the global ranking.
Top image: Shutterstock