Living in Asia Most Expensive City, Singapore is an big affair but for foreigners, things seem to be getting even tougher. As a grueling economic year draws to a close, the Asian Competitiveness Institute (ACI) report has rated the city as the most expensive place in Asia for expatriates. This comes after another study by Mercer’s 21st annual Cost of Living Survey in June which rated it as the 4th most expensive city for expats.
The ACI report places Singapore after Caracas, New York and Zurich. This is a 3 spot rise from the 2014 index which placed it seventh. The study which is carried out annually considers the cost of living, purchase power of expats and residents across the globe. This year’s index sampled 103 cities across the globe.
Tough Times for Expats
The SGD appreciated by almost 25% between 2005 and 2013. The study says that in the foreseeable future, this appreciation will remain constant despite growing economic uncertainties. With more investments expected in the New Year, the country is upbeat that it will keep up the momentum despite fears in the property market where prices have declined throughout the four quarters.
The stable economic situation in the city has largely contributed to the growing stability of the Singapore Dollar against the U.S dollar. With indicators showing the SGD is going to grow steadily against the USD, expatriates have been alerted to be aware of income fluctuations especially if they are paid in U.S dollars.
The situation also applies if they are paid in their home currency which means they will get reduced salaries. The Asian Competitiveness Institute (ACI) says that with a stronger SGD, there will be less consumption power amongst the expats in the country. On the other hand, they will face fewer constraints if they are paid in the Singapore dollar.
Fortunately for ordinary citizens, living costs will remain unchanged from last year. This means the country is the 48th most expensive country in the world. The purchasing power of residents is ranked as 21st in the world. While the report shows things will be tougher for expats, it also notes that the situation will depend on individual firm’s policies.
Another important consideration will also be the salary for expats vis-à-vis those of the local staff. Of great concern according to Professor Tan Khee Giap, a co-director at ACI, is the fact that some MNC’s might be forced to relocate if the manpower issue becomes a long-term problem.