Singapore Named ‘World's Costliest City': EIU Report

With a consistently high cost of living, Singapore ranks as the world's most expensive city for the 8th time in a decade.

Singapore ranks as the 'most expensive city in the world according to the Economist Intelligence Unit's annual Worldwide Cost of Living 2022 report. This year, it shares the top slot with New York City too. The latest EIU report shows that a combination of high incomes and a strong exchange rate propelled both financial hubs to the top of the list.

This is the eighth time in 10 years that Singapore topped the list, and New York topped the rankings for the first time. Both these cities, Singapore and New York, rose from the second and sixth positions in last year's rankings and dethroned Tel Aviv, which fell to third place, thanks to higher inflation and stronger currencies. After Singapore, New York and Tel Aviv, Hong Kong ranked fourth, followed by Los Angeles, Zurich, Geneva, San Francisco, Paris and Copenhagen to round out the top 10.

Singapore's High Cost Of Living

The EIU report highlighted that the country has faced a consistently high cost of living; "The city-state has the world's highest transport prices, owing to strict government controls on car numbers. It is also among the most expensive cities for clothing, alcohol and tobacco, thanks to its success as a premier location for business investment."

It is because of Singapore's strong currency that it has a tendency to rank highly on EIU's index. Ms. Upasana Dutt, Head of Worldwide Cost of Living at EIU, said that compared to other currencies, the Singapore dollar depreciated relatively less, which caused the city to stay one of the most expensive. Beyond Singapore's strong currency, EIU also pointed to high inflation, which has led to the cost of living soaring in the world's major cities as the war in Ukraine and continuing Covid-19 pandemic restrictions disrupt supply chains, particularly for energy and food.

However, Singapore's Ministry of Trade and Industry (MTI) reiterated that the Worldwide Cost of Living report "does not accurately reflect the cost of living for Singaporeans". MTI added that while a strong local currency influences how cities rank on EIU's list, it does not raise the cost of living of Singaporeans who earn their income in Singapore dollars. Speaking on the ranking parameters, EIU said that prices are higher when expressed in international common currency, while structural factors such as competition or high demand also play a key role in determining the cost of living. It added that because it converts domestic currency prices into US dollars to calculate each city's index, EIU's rankings are also driven by exchange rates against the US dollar.