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Author: Li Jiahui
SINGAPORE, 12 December (ANI): The latest Economist Intelligence Unit (EIU) Worldwide Cost of Living (WCOL) Index, released earlier this month, declared Singapore and New York City (US) tied as the “most expensive cities in the world”. .
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Tel Aviv (Israel), which ranked first in 2021, dropped to third place. Tel Aviv earned the title of “most expensive city” last year largely because the shekel rose nearly 20 percent against the dollar, while real estate prices soared 40 percent in two years.
According to the EIU report, the average cost of living in the 172 major cities covered by its survey will rise by 8.1% by 2022. This is the fastest pace in the 20 years that the EIU has digital cost of living data.
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The rise was largely due to the war between Russia and Ukraine pushing up energy, food and commodity costs, among other things. The price of a liter of petrol has risen an average of 22% in local currency terms over the past year amid rising global oil prices.
Additionally, the ongoing impact of the pandemic is still affecting the supply chain. Both COVID-19 and war have disrupted production and trade around the world. Surprisingly, this is the first time New York has topped the rankings, while Singapore has topped the list for the eighth time in a decade.
So how do the more than 500,000 Indians living in Singapore (including local residents and citizens, as well as those who work here) cope with living in the most expensive city in the world?
First, it’s important to understand that the EIU WCOL survey is designed to enable human resources and financial managers to calculate cost of living allowances and develop compensation packages for expatriates and business travelers.
Consumer goods companies and others could also use it to map pricing trends, determine the best prices for their products in various cities, and understand relative costs in a city to develop policy guidelines, the EIU explained.
WCOL is a biannual survey conducted by the EIU that compares more than 400 individual prices for more than 200 products and services in 172 cities. In 2021, when Kiev is included, the number of cities covered increases to 173.
The survey, which has been in operation for more than 30 years, collects data in March and September each year, compiles it into an index by its team of economists, and releases it in June and December.
Examples of items included in the survey include groceries, alcohol including expensive alcohol such as brandy, whiskey and absinthe, housewares, personal care, clothing, utilities, international weekly news magazine subscriptions, three-course dinners, theater Seats and museums, international school tuition, golf course green fees, tennis court rentals, fitness center subscriptions and transportation, including prices for various cars, repairs and taxis.
Not all of these are things that a typical Singaporean resident or person working here would choose to spend on, especially those on a regular salary. For people living in Singapore, the two most expensive items are houses and cars.
While rents rose about 10 percent last year, and some reports say 20 percent this year, car prices have soared 30 percent. Singapore has committed to a zero-growth policy for cars and motorcycles and intends to keep it until 2025.
This is controlled through the auction of “certificates of title” for the purchase of brand new cars. Currently, such certificates cost between S$88,500 (US$65,000) and S$105,500 (US$778,000), depending on the type of car purchased.
However, a car is a luxury and not really necessary in a city that is well connected by affordable public transport. The average journey cost S$2.00 (US$1.47) on Singapore’s clean and efficient Mass Rapid Transit (MRT) train system.
As for housing, there are options to keep costs in check, such as downgrading to a smaller apartment or living a little further out of the city. Singapore is a small island only 50 kilometers wide, not far away.
If you’re not a whiskey-and-wine expat enjoying big paychecks and three-course meals at fancy restaurants, there are plenty of great-value meals to choose from when dining out in Singapore.
An average meal at a local hawker center costs around S$5.00 (US$3.70), including drinks. Indians in Singapore can enjoy poori for S$4.70 and regular dosai for S$2.90 at popular restaurant Komala Vilas in Little India (Serangoon Road).
As for entertainment, there are many less expensive options than going to the theater, golf and tennis. The latest EIU WCOL survey, conducted between August 16 and September 16, measures commodity prices in local currency but converts them to US dollars for ranking purposes.
So, in addition to high inflation, a stronger currency tends to cause cities to rise in the ranking. This year, the dollar has strengthened against many currencies as the Federal Reserve (the U.S. central bank) raised interest rates. High incomes and a strong exchange rate are the main reasons why Singapore and New York rank first this year.
The good news is that the EIU expects prices to start falling in some countries as interest rates fall and the global economy slows. Supply chain congestion should also start to ease as freight rates fall and demand softens.
“The war in Ukraine, Western sanctions on Russia, and China’s zero-virus policy have led to supply chain issues, which, combined with rising interest rates and currency movements, have created a global cost-of-living crisis,” said Upasana Dutt, EIU’s global cost-of-living director.
“We can clearly see the impact of this year’s index, with average price growth across the 172 cities we surveyed the strongest in the 20 years we have numbers. We expect prices to recover as supply bottlenecks begin to ease and the slowing economy weighs on Consumer demand is putting pressure on the situation, which should improve next year.” (Arney)
(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)
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