According to the latest annual survey by the Economist Intelligence Unit (EIU), Singapore has maintained its position as the most expensive city globally, now sharing this title with Zurich. This change marks a shift from last year’s tie with New York, which has fallen down the rankings.

The survey assesses various cost categories to assist organizations in determining cost-of-living allowances and compensation packages for expatriates and business travelers. Despite some moderation in inflation, the global cost-of-living crisis persists. Prices have risen by an average of 7.4% in local currency terms, slightly lower than the previous year’s 8.1%, yet still significantly above the trends observed between 2017 and 2021.

Singapore’s high price levels are notably driven by transportation costs, largely due to strict regulations on car ownership. The city-state is also among the priciest locations for clothing, groceries, and alcohol, reflecting its status as a premier business hub.

Zurich’s high ranking is attributed to the robustness of the Swiss franc, with elevated prices in groceries, household goods, and recreational activities. Upasana Dutt, head of worldwide cost of living at EIU, mentioned that the supply-side shocks responsible for price increases in 2021 and 2022 have diminished since China lifted its COVID-19 restrictions, and energy prices have also stabilized since the spike following Russia’s invasion of Ukraine.

The EIU report highlights that Asia exhibits relatively low price increases on average, with several Chinese and Japanese cities experiencing significant declines in their rankings this year.

In light of the impending Goods and Services Tax (GST) increase, Mr. Vipul Chawla, Group CEO of FairPrice Group, plans to address initiatives to help manage living costs amid rising inflation.

Despite various economic pressures, the EIU anticipates that inflation will further decelerate in 2024, as the residual impacts of interest rate hikes start to influence economic activities and consumer demand.

The ten most expensive cities identified in the survey include Singapore and Zurich (tie), Geneva and New York (tie), followed by Hong Kong, Los Angeles, Paris, Copenhagen, Tel Aviv, and San Francisco.

A spokesperson from Singapore’s Ministry of Trade and Industry noted that the EIU survey may not accurately reflect the cost of living for Singaporeans, as the consumption basket used does not align with local consumption patterns. Prices are converted to US dollars for comparison purposes, and Singapore’s strong exchange rate plays a role in its higher ranking by mitigating the effects of imported inflation.