The Economist Intelligence Unit's (EIU) 2020 edition of its worldwide cost of living survey has identified as the world's most expensive city for expatriates for the seventh straight year. This year it is sharing the top spot with Hong Kong and Osaka.
"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," said Simon Baptist, Global Chief Economist.
He further added that it is because the Singapore dollar has been "relatively strong" compared with many other currencies such as the Australian dollar, the euro as well as the Chinese yuan, cities which use those currencies that the others became less expensive when compared with Singapore.
Here are some other key insights from the findings of the survey:
- On a global level, the survey found the cost of living falling by around 4 per cent on average across the 133 cities surveyed.
- Asia has been identified to have the most varied cost of living as a continent. Interestingly, while Asia had the biggest proportion of the 10 least expensive cities in the ranking, the top-ranked cities are also dominated by Asian business hubs.
- South Asia remains "structurally cheap" due to low wages and high levels of income inequality.
In December last year, the cost of living survey published by ECA International, had recognized Singapore as the the seventh most expensive location in Asia for expatriates to live. It was more expensive that Seoul and Shanghai. Then also it was the continued strength of the Singapore dollar that had made Singapore an expensive city to live in for expats. In Singapore this year, the average price for a one-kilogramme loaf of bread fell to US$3.35 from US$3.40 a year ago. The average price of a bottle of beer dropped to US$2.25 from US$2.37 the year prior.
Expat talent is critical for Singapore
As of 2019, 1.1 million foreigners made up about a third of Singapore's workforce of 3.4 million. The country, however, for some time now has been working towards promoting more local talent. In fact, its budget decisions have also primarliy been around upskilling the local talent and aiming for reduction in the service sector’s dependence on foreign workers in Singapore.
On top of these measures, the government is pushing harder for Singaporean workers to reskill. Budget 2020 provides for a one-off S$500 top-up to SkillsFuture Credit, a targeted funding for Singaporeans who want to learn new skills or obtain new qualifications.
Nonetheless, expatriate workers will always remain an important part of the workforce, as companies continue to struggle to find right talent and relevant skills.
Read this interview with Lee Quane, Regional Director – Asia, ECA International where he talks about the importance of expat talent for Singapore: ‘Expatriate workers will remain critical to Singapore workforce’