Singapore falls two places in cost of living rankings on weaker SGD: ECA International

SINGAPORE has fallen two places to rank 14th among the most expensive locations in the world for expatriates, mainly due to a weaker Singapore dollar (SGD) resulting from the local economic impacts of the Covid-19 pandemic.

This is according to the latest cost of living rankings for 2020 by ECA international, a provider of data for managing and assigning employees worldwide.

"Both the direct impact of the Covid-19 pandemic on the local economy and the resultant fall in trade from the global recession left a blow on Singapore's economy," says ECA's regional director for Asia, Lee Quane. "This contributed to the weakening of the Singapore dollar compared to stronger currencies, like the Danish kroner and Swiss franc. As such, Copenhagen and Bern moved above the city state in the rankings this year."

Both globally and in Asia, Hong Kong remains the most expensive location for expatriates to live in, despite a fall in rental prices over 12 months. The city's stability in global rankings is reflective of low inflation and a stable currency, which in turn allows companies to budget costs better and more accurately for their overseas employees, says ECA in a press statement on Tuesday.

The greatest fall in rankings this year was seen in Mumbai, which dropped 34 places to 94th globally on the back of a weak rupee combined with cheaper expatriate rental rates.

Similarly, Thai and Vietnamese cities have fallen at least 10 places in the rankings for this year due to the significant weakening of the Thai baht and Vietnamese dong against major currencies amid the Covid-19 pandemic, partly as a result of fewer visitors travelling to the region as well as falling rental costs due to weaker demand.

On the other hand, Australian cities have climbed up in rankings this year with Sydney entering the global top 50, in line with the Australian dollar's strong performance this year.

"While (Australia) is in the middle of its first recession in 29 years, swift measures taken by the authorities have resulted in a fairly limited spread of Covid-19 cases compared to many other nations around the world," said Mr Quane.

Chinese tier one cities such as Shanghai, ranked 11th globally, however feature in the 2020 rankings for the world's top 20 most expensive cities despite the weaker renminbi and deflation. ECA attributes this buck in the trend to lower global oil prices in the face of weaker travel demand, leading to a significant drop in petrol costs by nearly 15 per cent in many Chinese cities over the past year.

Elsewhere, the drop in oil prices as a result of Covid-19 has caused large economic downswings, weaker currencies and subsequent drops in ECA's cost of living rankings for the current year. Luanda, Angola, notably fell furthest in this year's global rankings, dropping 104 places to 141st from 37th.

ECA's cost of living rankings combines the data provider's biannual cost of living research, as well as annual accommodation reports, to compare costs faced by expatriates in 208 cities across 121 countries and territories. The comparison of cost of living is calculated on a base composed of various developed countries, and is used to reflect an international lifestyle, says ECA.