Singapore may be the most expensive city in the world – but only if you’re not Singaporean.
At least that’s what one of the city-state’s top officials is suggesting.
A day after a new cost-of-living index released by the Economist Intelligence Unit dubbed Singapore the costliest city globally, Deputy Prime Minister Tharman Shanmugaratnam downplayed the results by saying they did not quite reflect average Singaporeans’ ability to meet daily living expenses.
Cost-of-living surveys like the one produced by the EIU “are really aimed at measuring expatriate costs of living in different parts of the world,” he said during a budget debate in Parliament on Wednesday.
A strengthening local currency has actually improved Singaporeans’ purchasing power, especially since the city-state relies on imports to meet many basic needs like food and energy, said Mr. Tharman, who is also finance minister. He pointed out as well that such studies typically track goods that are associated with expatriate spending, which are often on the high end.
His comments come as a growing number of Singaporeans have been lamenting rising cost pressures in the wealthy city-state. The government projects inflation to range between 2% and 3% for the whole of this year, after posting an inflation rate of 2.4% in 2013.
Officials say they are aware of these pressures and the impact they have on citizens. They say they have taken steps to help ease financial burdens, particularly those placed on the poor.
Even so, Mr. Tharman said Singaporeans should not read too much into cost-of-living surveys that target an expatriate audience.
“It’s not that these surveys are wrong, it’s not that they are misguided,” he said. “They are measuring something quite different from the costs of living for an ordinary local.”
The EIU says its survey, published every March, is intended for human-resources managers who use the findings to calculate how to compensate managers and executives as they move from one city to another.
The latest edition compares 131 cities around the world using New York as the baseline. The survey doesn’t assess real estate prices or income taxes, but it does factor in consumption taxes, on alcohol and tobacco for example.
Singapore’s ranking rose by five spots due to rising transport costs, expensive alcohol and increasingly pricey clothes, among other factors, according to the EIU.
Since the study’s release, many Singaporeans have shared comments on social media saying the findings resonated with them. They also used the opportunity to criticize government policies—such as liberal immigration policies implemented in the 2000s—that they blame for driving up living costs, particularly in areas like housing and transport.
Mr. Tharman said what’s important for the government is ensuring that residents—particularly those from low-to-middle wage brackets—have incomes that grow faster than the cost of living.
For an alternative global comparison of such costs, he cited a 2012 study by the Asia Competitiveness Institute—a research arm of the National University of Singapore—that tracked living costs and purchasing power in 109 cities, but with separate indices for expatriates and locals.
According to that study, Singapore was ranked the fifth-most expensive city for expatriates, but came in at the 61st spot for average residents.