Is Singapore the most expensive city to live in?

Yes... But only for expatriates.


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In the Economist Intelligence Unit’s (EIU) Worldwide Cost of Living (WCOL) survey conducted in 2017, Singapore was ranked as the most expensive city for expatriates to live in for the fifth consecutive year. The WCOL survey is designed to allow HR managers and expatriates to compare the cost of living in 133 cities globally, and to enable the HR managers to work out appropriate compensation policies when relocating employees.

The survey findings do not reflect the cost of living of Singaporean households. Here’s why:

1. All prices are converted from local currencies to US dollars1, which means that the rankings are sensitive to currency fluctuations.

From 2004 to 2016, the Singapore dollar appreciated by nearly 18% against the US dollar. This significantly increased the price of goods and services expressed in US dollar terms, thus contributing to the rise in Singapore's ranking in the EIU survey over this period. In 2017,  the Singapore dollar appreciated further against the US dollar, which in turn was likely to have kept Singapore’s ranking high.

While such currency fluctuations affect the rankings and cost of living of expatriates who earn their income in foreign currencies, they have less impact on Singaporeans who earn their income in the local currency. 

2. The items in the EIU consumption basket2 are quite different from the goods and services regularly consumed by Singaporeans.

For example, the EIU’s consumption basket includes items like filet mignon and international foreign daily newspapers. Comparatively, the typical Singaporean consumption basket includes items such as local newspapers and chicken rice, which tend to be less expensive.

3. The prices of comparable items in the EIU survey are higher than what Singaporeans pay3

For example, in its publication, the EIU reports the prices of items such as bread and unleaded petrol.4 For these items, the prices in the surveys conducted by the Department of Statistics (DOS), which are more representative of what Singaporeans pay, are lower or closer to the lower end of the price range reported by EIU.

Table 1

In fact, for comparable items in both the EIU and Singaporean consumption baskets, the prices of close to 95% of them are lower in DOS 5surveys than in the EIU survey. Among these items, about 40% had prices that are less than half of EIU’s prices. The tables below compare the prices of some commonly purchased items6 collected by DOS and EIU.

Table 2 

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Source: Singapore Department of Statistics, EIU Worldwide Cost of Living 2017

*Prices from the EIU WCOL survey have been scaled to match the units used by DOS

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1 EIU converts all prices to US dollars because the WCOL survey is intended as an international guide to global companies.

2 DOS has comparable data for about 120 out of 170 items included in the EIU WCOL basket.

3 In all cities, including Singapore, the WCOL survey selects items from stores frequented by expatriates, which tend to be higher priced than those used by the general population in a given city.

4These items were chosen by EIU as they make up a significant share of household expenditure in a wide range of cities globally.

5 DOS collects the price data for more than 6,600 brands/varieties of goods and services in its monthly and yearly surveys. Prices of selected items are published in the Singstat Table Builder.

6 These items have been selected by MTI for illustrative purposes as they are items regularly purchased by Singaporeans.

7The price range for the monthly electricity bill in the EIU survey is based on the consumption of a spacious property serving a wealthy expatriate family of four (plus possible domestic helpers).

 

This article is accurate as of May 2018. For updates, please refer to the Ministry of Trade and Industry.


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Unless otherwise indicated, the articles here are generally accurate as of their publication dates. Please visit the relevant Goverment agency website for the latest updates.