The stronger ringgit coupled with inflation has pushed Kuala Lumpur up four spots to become the 33rd most expensive city in Asia for expatriates this year, according to a study by outsourcing firm ECA International.
Not far behind was Johor Baru in 37th spot and 40th-placed George Town, the only other Malaysian cities to make it into the top 53 most expensive Asian cities in the London-based consultant’s annual cost of living survey released yesterday.
Singapore moved three spots up the Asian ladder from ninth to sixth, also on the back of higher currency values and inflation.
Japanese cities Tokyo, Nagoya, Yokohama and Kobe remained unchanged in the first four places, with Seoul, Hong Kong, Beijing, Shanghai and Busan rounding out the top 10.
Hanoi’s tumble from 200 to 224 was the largest recorded for any Asian city while the port city of Karachi, Pakistan’s financial centre, remains the cheapest location in Asia and globally at 240.
In global rankings, Kuala Lumpur was the 186th most expensive city for expatriates — up 16 places from 201st place — while Johor Baru and George Town placed 199th and 209th, respectively.
ECA International Asia regional director Lee Quane said currency movements were the single largest factor in country rankings but added that inflation was also contributed significantly to higher expatriate cost of living in cities.
“Currency movements still have the biggest influence on rankings. In Asia, the Singapore dollar, Malaysian ringgit and Mongolian tugrik have appreciated the most over the twelve months between surveys,” he said in the survey report.
“In some cases, strong currencies have contributed just as much as inflation to a country’s rise up the ranking. As well as Singapore, we have seen this happening in Ulaan Baatar, Bangkok and Kuala Lumpur — these locations have risen by 23, 20 and 16 places respectively.”
Quane pointed out, however, that cities like Hong Kong and Vietnam have fallen down the tables despite “major increases” in local prices as their weakening currencies offset the impact of price inflation from higher food, oil and commodities cost.
Malaysia’s inflation hit a two-year high of 3.2 per cent in April but Bank Negara Malaysia (BNM) maintains that the consumer price index (CPI) will not exceed 3.5 per cent this year, as forecast earlier.
The central bank said the recent round of diesel and electricity subsidy cuts will have minimal impact on inflation but opposition lawmakers warned that higher fuel costs will push up the price of essential goods.
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