MTI: Singapore’s top ranking in world’s most expensive cities list does not reflect the cost of living

SINGAPORE: A recent report by British publication The Economist declared Singapore the world’s most expensive city, sharing the top spot with Zurich, Switzerland. However, the Ministry of Trade and Industry (MTI) has been quick to assert that this ranking doesn’t accurately reflect the cost of living Singaporeans face.

According to an MTI spokesperson, The Economist‘s survey primarily serves human resource and financial managers globally, aiding them in calculating the cost of living for employees in major cities. The information is particularly valuable for expatriates, business professionals, and employers developing compensation packages. The spokesperson highlighted a key discrepancy, noting that the consumption basket used in the survey diverges from typical Singaporean spending habits. Items like brand-name raincoats and foreign newspapers included in the report are not standard purchases for Singaporean households.

Moreover, the survey’s conversion of prices into US dollars for inter-city comparisons plays a role in Singapore’s high ranking. The strong Singaporean exchange rate contributes to this, although the spokesperson emphasized that a robust currency doesn’t inflate the cost of living for residents earning Singapore dollars.

On the contrary, he said, a stronger local currency aids in lowering import prices, subsequently curbing imported inflation and consumer costs. Acknowledging public concerns about the rising cost of living, the spokesperson said that the Government is aware of these concerns and has introduced initiatives to alleviate these pressures.

MTI pointed out that in the 2023 budget, the Assurance Package was increased from $6.6 billion to $9.6 billion. Additionally, an extra $1.1 billion aid package was unveiled in September, earmarked for supporting Singaporean families, especially those in the low- and middle-income brackets.

This supplementary aid, including an $800 million measure beyond the budget, pushes the total reassurance and assistance package beyond $10 billion. According to MTI, this comprehensive support is designed to fully cover the increased spending incurred by low-income households due to inflation and sales tax hikes, substantially mitigating the impact on middle-income households.

The spokesperson assured the public that the government remains vigilant, closely monitoring the situation, and stands ready to provide continued support to help citizens navigate economic challenges.