In terms of cost of living, Singapore remains the ninth most expensive location in Asia and that could result in companies here needing to pay out larger living allowances when hiring expatriates.
Cost of Living survey by ECA International
The latest Cost of Living survey by ECA International has seen Singapore retaining its position as the ninth most expensive location in Asia to live in. The city has also climbed six places in ECA’s global rankings and is now 67th, overtaking top-ranked Chinese cities such as Guangzhou and Shenshen. The rise has been attributed to the strong Singapore dollar which is relative to other major currencies in the region.
But Lee Quane, regional director for ECA International in Asia, felt that this is a double-edged sword for Singapore. “On the one hand companies sending staff out of Singapore need to pay lower cost of living allowances for an employee to maintain their standard of living on assignment,” he said. “On the other hand, for companies bringing staff into Singapore, allowances will carry on increasing as Singapore continues to rise up our ranking table.”
Tokyo has also regained its status as the world’s most expensive city, for the first time in five years as the Japanese yen continues rising in value against the US dollar in the last three years. African city Luanda’s fall from the top spot was attributed to the depreciation of the Angolan currency kwanza as its unofficial peg against the US dollar was loosened.
Korean cities Seoul and Busan, as well as, Hong Kong, Beijing and Shanghai are among the region’s top ten most expensive as currency fluctuations impact the locations’ rankings over the last year. Appreciation of the Indonesian rupiah over the same period has seen Jakarta risen 71 places to 121st position globally while Shanghai and Beijing have dropped 18 and 29 places respectively.
Quane said the changes in the cost of living should give companies a greater need to monitor and review their allowances accordingly in order to keep up with the changing exchange rates and prices. Several locations including Thailand, India, Philippines and Vietnam have experienced considerable inflation as the economy recovers. Political situations are also having an impact on assignees’ purchasing power, Quane said, as the unrest in Bangkok has seen prices rise there.
Karachi, Islamabad and Kolkata are the cheapest locations in the region for international assignees.
Sources and references: HRO, ECA International - Cost of Living Survey
