Singapore becomes ‘most expensive city,’ Indians cope up with expenses

SINGAPORE: Singapore is the most expensive city in the world, where about half a million Indians are staying, and with housing rent and car rent spiked by 20 per cent and 30 per cent respectively, the question is how these Indians cope with living in such place.

In the latest survey conducted by Economist Intelligence Unit (EIU) Worldwide Cost of Living (WCOL) Index, Singapore and New York City called as joint “most expensive cities in the world.”

The EIC WOL is designed in such a way as to enable human resources and finance managers to calculate cost-of-living allowances and build compensation packages for expatriates and business travellers.

The WCOL is conducted twice yearly that compares the 400 individual prices across more than 200 products and services in 172 cities. In 2021, the number of cities covered increased to 173 when Kyiv was included.

According to the EIU report, the average cost of living has gone up 8.1 per cent in 2022 in the 172 major cities it covered in its survey. This is the fastest rate in the 20 years for which EIU has digital cost-of-living data.

In Singapore, the two most expensive items are housing and cars whose rental has increased by 20 per cent this year and 30 per cent respectively. In this expensive city, the best escape from rising housing rentals is to downgrade to a smaller apartment or live a little further from the city.

An average meal at a local hawker centre cost about SGD5.00 (USD3.70) including drinks. Indians in Singapore can have poori for SGD4.70 and plain dosai for SDG2.90 at the popular restaurant Komala Vilas in Little India (Serangoon Road).

As for recreation, there are many cheaper options than going to theatres and playing golf and tennis. The latest EIU WCOL survey, conducted between August 16th and September 16th measured prices of items in local currency but converted that to US dollars for ranking purposes.

Therefore, besides high inflation, a stronger currency will tend to see a city rise in the rankings. This year saw the US dollar strengthen against many currencies as the Federal Reserve (US central bank) raised interest rates. High incomes and a stronger exchange rate are the main reasons Singapore and New York are ranked number one this year.

The good news is that EIU expects prices to start to ease in some countries as interest rates bite and the global economy slows. Supply-chain blockages should also start to ease as freight rates come down and demand softens.

EIU believes that the hike in price is the result of Western sanctions on Russia, the Ukraine-Russia conflict, and China’s zero-covid policy that affected the supply chain in the country.

“The war in Ukraine, Western sanctions on Russia and China’s zero-covid policies have caused supply-chain problems that, combined with rising interest rates and exchange-rate shifts, have resulted in a cost-of-living crisis across the world,” said Upasana Dutt, Head of Worldwide Cost of Living at EIU.

“We can clearly see the impact in this year’s index, with the average price rise across the 172 cities in our survey being the strongest we’ve seen in the 20 years we have digital data. We expect prices to start easing over the coming year as supply bottle-necks start to ease and slowing economies weigh on consumer demand.” (ANI)