Singapore — In terms of cost of living, Singapore is now the most expensive city in Asia. Compared to the rest of the world, it tied Paris in second place.
Only Tel Aviv tops both of them, according to the latest survey results of the Economist Intelligence Unit (EIU), which was released on Dec 1.
Last year, Singapore was in fourth place.
EIU’s Worldwide Cost of Living (WCOL) survey shows that an uptick in prices has been felt all over the world this year, with the inflation rate rising by 3.5 per cent year-on-year in local currency terms. In 2020, the inflation rate was 1.9 per cent.
Supply chain problems, as well as changes in exchange rates and consumer demand, have driven up global inflation.
The biggest sector affected by inflation is transport, with the price of petrol increasing by aN eye-watering 21 per cent.
The recreation, tobacco, and personal care industries have also been affected by inflation. For example, the average price of a pack of branded cigarettes has risen by 6.7 per cent this year.
Globally, the increase in the price of food had not been as drastic, with the cost of beer, as one example, staying pretty much the same since last year.
And the average price of clothing has actually gone down.
How is Singapore faring compared with the rest of the region?
A fair comparison would be with Hong Kong, which topped the last EIU survey in 2020. This year, it is in fifth place.
However, Hong Kong has the most expensive petrol around the globe, at US$2.50 (S$3.41) per litre. In comparison, petrol cost US$1.89 (S$2.58) in Singapore, as of Nov 29.
Another city in the region useful to compare with Singapore in terms of cost of living would be Bangkok, whose ranking actually went down in 2021. It slipped two notches down to 57th place in EIU’s survey.
“Although most economies across the world are now recovering as Covid-19 vaccines are rolled out, many major cities are still seeing spikes in cases, leading to social restrictions. These have disrupted the supply of goods, leading to shortages and higher prices,” said Upasana Dutt, the Head of Worldwide Cost of Living at EIU.
While the situation may remain the same, or even worsen, for most of 2022, it is likely to improve toward the end of that year.
“Over the coming year, we expect to see the cost of living rise further in many cities as wages increase in many sectors. However, we are also expecting central banks to raise interest rates, cautiously, to stem inflation. So the price increases should start to moderate from this year’s level,” Ms Dutt added. /TISG