Being the world’s most expensive city might cause Singapore to lose its competitive edge as companies, feeling the pinch from higher costs, choose to relocate to nearby regional centers such as Malaysia.
Just recently, IKEA announced that it would set up its multi million dollar regional hub in Malaysia, not Singapore.
In August 2016, Credit Suisse economists attributed a fall in Singapore’s market share in global goods trading to higher costs of operating in the country. Being dependent on trade, this puts Singapore at a disadvantaged position.
The Economist Intelligence Unit, the research and analysis division of the Economist Group recently ranked Singapore number 1 out of the world’s cities.
Of the top 10, Singapore ranked number 1, followed by Hong Kong. Third place went to Zurich, Switzerland, the city with the highest cost of living in Europe, followed by Tokyo and Osaka in Japan at 4th and 5th respectively. Seoul, South Korea, Geneva, Switzerland, and Paris tied for 7th place, while New York and Copenhagen took 9th place.
The study ranks the cities based on how expensive it is to buy basic necessities such as food, drinks, clothing, recreation and entertainment, including the costs of buying and maintaining a car. It also includes renting a home, utility bills, private schools and domestic help and weighs the relative strength of the countries’ respective currencies.