SINGAPORE: On Dec 1, the Economist Intelligence Unit (EIU) ranked Singapore as the most expensive city, sharing the top spot with New York. Last year,
SINGAPORE: On Dec 1, the Economist Intelligence Unit (EIU) ranked Singapore as the most expensive city, sharing the top spot with New York. Last year, Singapore was in second place, tied with Paris.
This is the eighth time in a decade that Singapore has claimed the number one spot, while it’s a first for New York. Tel Aviv, which was the most expensive city in 2021, has now dropped to third place.
The finance website dollarsandsense.sg recently highlighted four key reasons why Singapore has once again topped this list: high inflation, a strong Singapore dollar, pandemic restrictions combined with the war in Ukraine, and the high cost of discretionary goods.
In 2021, global prices rose by an average of 3.5 per cent. This year, that figure more than doubled to 8.1 per cent. “This is the fastest rate in at least 20 years. Petrol prices have seen the most rapid increases, but utility and food prices have also surged,” according to the EIU.
In Singapore, the average inflation rate is around 6 per cent, as reported by the Monetary Authority of Singapore and the Ministry of Trade and Industry, with food and accommodation costs being significant contributors.
An article in Financial Review on Dec 2 noted that the cost of a certificate to drive a car in Singapore for ten years (COE) has skyrocketed from S$55,000 last year to over S$90,000 in 2022, due to fewer certificates being deregistered. Additionally, rents for HDB flats and private housing prices have surged by over 30 per cent year-on-year, according to real estate data.
However, there’s some hope on the horizon. Prices may ease next year, as improvements in supply chain disruptions and bottlenecks are expected. Global consumer price inflation is forecasted to fall from 9.4 per cent in 2022 to 6.5 per cent in 2023, says the EIU.
“Unless the war in Ukraine escalates, the EIU predicts that commodity prices for energy, food, and supplies such as metals will likely drop sharply in 2023 compared to 2022, though they will remain higher than pre-pandemic levels,” dollarsandsense added.
On Dec 7, the Singapore government responded to the EIU ranking, noting that it “may not reflect the cost of living for Singaporeans.”
“The WCOL (Worldwide Cost of Living) survey looks at the prices of a common set of products and services in various cities to allow for comparisons. As such, its consumption basket may not reflect what Singaporeans usually buy and is therefore not a good gauge of the cost of living for local households. For instance, it includes products such as Burberry-type raincoats and foreign newspapers, which are typically not purchased by Singaporeans. A more accurate indicator is the Consumer Price Index (CPI), which measures the average change in the prices of goods and services commonly purchased by Singaporean households,” the government said in a statement.
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