For the ninth time in eleven years, Singapore has made its way to the top of the global cost-of-living charts, sharing the crown with Zurich in Switzerland in 2023 and overtaking New York in the US, which fell to third place this year. This was reported based on the Economist Intelligence Unity’s (EIU’s) twice-yearly Worldwide Cost of Living survey. The survey was conducted from August 14 to September 11, 2023, comparing over 400 individual prices across more than 200 products and services in 173 cities.

Zurich moved up from sixth place to join Singapore at the top, bumping New York, which tied with Singapore for first place last year, down to third place. Zurich, which is back at the top after three years, moved up due to the strength of the Swiss franc as well as high prices for groceries, household goods and recreation. Overall, the top ten this year consist of two Asian cities—Singapore and Hong Kong; four European cities—Zurich, Geneva, Paris and Copenhagen; three US cities—New York, Los Angeles and San Francisco; and Tel Aviv in Israel. This survey was conducted before the start of the Israel-Hamas war, which has affected the exchange rates in Israel and may have made it harder to procure some goods in Tel Aviv, thereby affecting prices.

At the heart of this unwanted fame lies the global inflationary wave. The pandemic and subsequent supply chain disruptions have wreaked havoc on economies worldwide, and Singapore, despite its robust financial system, couldn’t escape the ripple effects. Grocery prices, a crucial indicator of everyday affordability, have seen a 7.4% increase for over 200 commonly used goods and services, with everyday essentials like cooking oil and meat bearing the brunt of the impact. Transportation, another significant contributor to the high cost of living, saw even steeper increases, particularly in car ownership due to strict government control on car numbers. This marks a decline from the record 8.1% increase reported last year, but price growth remains significantly higher than the trend in 2017–21. Although this year’s survey covers 173 of the world’s major cities, the global average has been calculated by excluding Kyiv (which was not surveyed in 2022) and Caracas (which continues to face hyperinflation), as was the case last year.

But inflation isn’t the sole culprit. The strength of the Singapore Dollar further inflates the cost of living for foreigners and tourists. This currency appreciation, driven by positive economic growth and foreign investment, makes imports pricier, impacting everything from consumer goods to restaurant bills. Singapore has the world’s highest transport prices, owing to strict government controls on car numbers. It is also amongst the most expensive for clothing, groceries and alcohol.

Globally, utility prices that included household energy and water bills, witnessed the slowest inflation of the ten categories covered in the survey. This was the fastest-rising category in 2022 and the moderation suggests an easing of the energy price shocks caused by Russia’s invasion of Ukraine. Grocery, on the other hand, saw the fastest pace of price growth. Food inflation has been sticky across the world as many manufacturers and retailers have passed on higher costs to consumers and the increasing frequency of extreme weather events continues to keep supply-side risks elevated.

Among the biggest decliners in the EIU list were Chinese and Japanese cities that were dragged down by the weakening Chinese yuan and Japanese yen. Chinese cities Nanjing, Wuxi, Dalian and Beijing all dropped more than 25 spots, while Tokyo and Osaka in Japan plummeted 23 and 27 spots, respectively.

However, it’s crucial to recognise that while Singapore’s price tag might induce sticker shock, it comes with a flip side: a high standard of living. The city-state boasts world-class infrastructure, a top-notch public healthcare system, and a safe and secure environment. Educational institutions consistently rank among the best, and career opportunities abound, particularly in finance, technology, and logistics. For high-income earners and global corporations, Singapore’s exorbitant costs are offset by its efficiency, security, and unparalleled quality of life.

So, what do you think? Is Singapore’s tag of being the most expensive city to live in correct? Let me know in the comments below.