S'pore gets more expensive as costs in region rise
SINGAPORE - Even as Singapore moves up two notches to sixth in Mercer's latest cost of living survey and remains, by some distance, the most expensive city in South-east Asia, several neighboring cities are becoming more expensive at a faster pace - no thanks to the influx of businesses into the region at a time when the infrastructure in most cities is still underdeveloped.
According to the survey, Manila shot up 17 places to 117th, Jakarta moved up eight spots to 61st and Bangkok rose seven places to 81st.
The survey covers 214 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.
Currency movements are measured against the United States dollar.
Mercer, a human resources consultancy, attributed the rapid climb by South-east Asian cities on the ranking to their strengthening currencies against the greenback.
But economists TODAY spoke to also noted that the middle-income populations in cities such as Manila and Jakarta are growing rapidly, pushing up demand for goods and services and leading to higher costs of living.
CIMB Research economist Song Seng Wun pointed out that with the euro zone in crisis and the US experiencing sluggish growth, the region has become more attractive to those seeking opportunities.
"However, the infrastructure in some cities hasn't quite kept pace," he said.
Several Chinese cities saw their rankings go up due to the strong yuan and higher rental costs: Shanghai and Beijing climbed five places and three places respectively to 16th and 17th place.
Mr Phil Stanley, Mercer's Leader for the Asia Pacific Global Mobility Centre of Excellence, said: "The combination of increased prices on goods and a strengthening of the Chinese yuan have pushed Chinese cities up the ranking.
"Continued high demand for accommodation has also led to moderate increases in rental costs."
In contrast, Indian cities New Delhi and Mumbai dropped considerably in the ranking by 28 and 19 places respectively, to 113th and 114th place.
All cities in Australia jumped up the rankings with the strengthening of the Australian dollar, while the weakening European currencies resulted in most cities in that continent moving in the opposite direction.
London, for instance, fell seven spots to 25th.
Mr Stanley attributed Singapore's rise up the rankings as "mainly due to the slight appreciation of the Singapore dollar against the US dollar", while DBS economist
Irvin Seah reiterated that there are other considerations beyond cost in determining a city's attractiveness as a place to live and work.
"Whether there is a robust regulatory framework, a conducive business environment, and whether it's a safe and pleasant living environment - all these are very important," he said.
And these factors still make Singapore attractive to expats and investors, he noted.
By Lin Yanqin
13 June 2012