S'pore less attractive to expats:
Survey
Island slowly edging its way up the list
of costliest cities
Singapore may be gradually losing its competitive edge to regional
rivals like Hong Kong as the rising cost of living deters
expatriates from coming here.
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This is according to a survey by human resource body ECA
International, which compared the costs of 128 consumer goods and
services purchased by expatriates in more than 300 cities. They
include groceries, drinks and tobacco, clothing, motoring expenses
and restaurant meals. Accommodation, car purchase and children's
school fees are not included because they are usually provided as
part of expat packages.
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According to the survey, Singapore is the ninth most expensive city
in Asia this year, up a notch from last year 122nd worldwide, up
10 rungs. Hong Kong's ranking has remained unchanged as the fifth
most expensive location in the region and 79th worldwide.
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In a head-to-head comparison, Hong Kong is 12 per cent more
expensive than Singapore, Shanghai 5 per cent more expensive, while
Kuala Lumpur is 30 per cent cheaper, ECA told Today.
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The most expensive city in Asia for expats is Seoul, followed by
Tokyo and Yokohama. Worldwide, the most expensive city is Luanda,
the capital city of Angola, followed by Oslo and Moscow.
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The consumer price index (CPI) in Singapore jumped 3.6 per cent
last month from that of a year earlier, the fastest pace in more
than 16 years, the Department of Statistics said last week.
Contributing to the rise was the 2-percentage-point increase in the
Goods and Services Tax (GST) in July and the surge in oil
prices.
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"The recent rise in GST and overall rising inflation resulting in
higher CPI have all contributed to pushing up living costs in
Singapore. This, together with no change in Hong Kong's position,
means that the gap is closing between the two traditionally
competitive locations," said ECA, the world's largest membership
organisation for human resource professionals.
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The strengthening of the Singapore dollar to a 10-year high against
the United States currency this month has also made the cost of
living dearer for expatriates.
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"Companies that need to send employees into Singapore will now have
to apply higher cost of living indices to salaries to guarantee
their personnel's spending power," said Mr Lee Quane, general
manager of ECA International in Hong Kong.
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Mr Quane's observation highlights the dilemma faced by the
Singapore Government. The threat of an inflationary spiral has
prompted calls for the Monetary Authority of Singapore to let the
local dollar strengthen further but there are concerns among the
business community that a stronger local currency will hurt export
competitiveness and diminish the island's attractiveness as a
business hub.
