SINGAPORE - Singapore is likely to remain one of the world's most expensive cities for expatriates due to its strong currency, said the Asia Competitiveness Institute (ACI).
However, the cost of living for the average Singaporean is expected to remain manageable as long as the Government continues to keep a close eye on the prices of essentials like education, health care and housing, said the think-tank.
The ACI, a research centre at the Lee Kuan Yew School of Public Policy, releases an annual cost of living index that distinguishes between living costs for expats and average residents.
Its 2012 study ranked Singapore the most expensive among 109 cities for expats, but when living costs for average residents were measured, it came in 60th. The rankings for 2013 will be released in November.
An Economist Intelligence Unit survey released earlier this month raised eyebrows for naming Singapore the world's costliest city. That survey was targeted more at expats and was for 2013. Although the Singapore dollar weakened against the greenback last year, the Japanese yen weakened far more, making Tokyo for example, relatively cheaper.
"As far as expat cost of living is concerned, Singapore will stay at the top since our currency is unlikely to weaken any time soon," said ACI co-director Tan Khee Giap. The Singapore dollar, which appreciated 25 per cent against the United States dollar between 2005 and 2012, bumped up the cost of living for expats, who are usually remunerated in foreign currencies.
If the exchange rate had held steady at 2005 levels, Singapore would have been the 16th most expensive city for expats in 2012. The Republic still remains much cheaper for the man in the street than cities such as New York, Paris, Tokyo and London - largely due to lower prices of education, housing and health care - the study showed.
"This is likely to remain the case as long as the Government remains committed to subsidising these essential services," said Dr Tan, who conducted the study with fellow co-director Tan Kong Yam and adjunct research fellow Grace Aw.
The difference between the cost of living for expats and Singaporeans is partly due to characteristics peculiar to Asian cities, he added."For example, in Asian cities, cheap food is more readily available," Dr Tan said.
At Friday's briefing to announce next month's launch of a book on the study, both co-directors emphasised that the indices are not intended as a measure of income or wealth disparity.
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