Hong Kong ranked 13th most expensive city in global cost-of-living survey
Hong Kong has scaled another rung on the cost-of-living ladder to become the 13th most expensive city to live in, an Economist Intelligence Unit survey shows.
Currency appreciation and inflationary pressures drove the city up the think tank's Worldwide Cost of Living index from last year's 14th place.
But in Asia, the city fell one position instead to 5th place, behind Tokyo, Melbourne, Sydney and the new title holder for the most expensive city in the world to live in - Singapore.
The widening gap in cost of living between Singapore and Hong Kong could make the latter a more attractive destination for multinational companies looking to relocate employees, Edward Bell, senior commodities economist at the EIU, said.
"From a cost perspective, if comparing the two key financial hubs, our findings show that Hong Kong would be the relatively cheaper place," he said.
The minor rise in Hong Kong's ranking generally reflected stable inflation in the city's cost of living, Bell said.
Singapore, on the other hand, saw a significant rise in costs this year because of higher structural costs such as transport, fuel and a stronger currency, he said.
The twice-yearly study looks at the prices, in US dollars, of 160 products and services in 140 cities across the world. These include food, alcohol, tobacco, toiletries, private schools, entertainment, clothing, domestic help, transport and utilities. Housing and rental costs are excluded from the survey.
The purpose of the survey is to calculate cost-of-living allowances and rationalise compensation packages for expatriates, the think tank says.
The weaker yen in Japan pushed Tokyo down from first place last year to sixth this year, and Osaka from second last year to Hong Kong's previous rank of 14 this year.
Chinese University economics professor Wallace Mok Kai-chung said he was not surprised about the findings.
He said the average salaries of Singaporeans had risen sharply over the years, and had now surpassed the wages of Hongkongers. With higher salaries came higher costs of commodities, Mok said.
In mainland China, meanwhile, the cost of living continues to rise. Almost all mainland cities climbed from their rankings last year.
The most expensive among them was Shanghai, which climbed nine spots to 101 on the worldwide index, surpassing New York City.
"Wage inflation has driven up local prices, but internationally, the impact of a stronger renminbi has also been felt," Jon Copestake, the report's editor, said.
The survey uses New York as its base city, carrying an index of 100. All other cities are compared to it.