Kuala Lumpur is now the 163rd most expensive location for expatriates in the world, having fallen six places in ECA’s cost of living rankings. This was one of the findings of the latest Cost of Living research published by ECA International, the world’s leading provider of knowledge, information, and software for the management and assignment of employees around the world.
“Petrol prices in Kuala Lumpur saw a significant increase of 49% over the past 12 months. However, this was offset by lower costs for housing in areas popular amongst expatriate staff, which caused overall inflation rates in Malaysia to come in lower than in many other locations. Coupled with the weaker Malaysian ringgit against other major currencies, the relatively low rates of inflation caused the city’s rankings to drop,” said Lee Quane, Regional Director – Asia at ECA International.
ECA International has been conducting research into cost of living for 50 years. It carries out two main surveys per year to help companies calculate cost of living allowances so that their employees’ spending power is protected while on an international assignment. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in over 490 locations worldwide. ECA’s accommodation data is also factored in, comparing rental costs in areas typically inhabited by expatriate staff in over 410 locations worldwide.
Global Highlights
Most locations within the EU have seen drops in the rankings after an unsteady period for the euro, with Paris falling out of the global top 30. Cities such as Madrid, Brussels, and Rome have fallen in rankings as well.
Quane said, “Nearly every major eurozone city saw a drop in the rankings this year as the euro performed worse in the last 12 months than the US dollar and British pound. The euro’s weakness was mainly caused by market expectations of the European Central Bank to raise its interest rates more slowly than its peers.”
Southeast Asian locations fall in rankings, hampered by weak currencies and slower economic recovery
Many of Malaysia’s neighbours in Southeast Asia have also fallen in the rankings over the past 12 months. In Thailand, a mix of currency weakness and relatively low rates of overall inflation have contributed to the decline of its cities in the global rankings, with Bangkok falling 13 places to 47th. Similar trends were seen in other locations in Southeast Asia.
Quane explained, “While Laos and Myanmar experienced high rates of inflation – almost 10% – in the past 12 months, they still fell in our rankings as their currencies have weakened considerably. Laos was struggling with both lower exports to China, and the affordability of its rising foreign debt. In the case of Myanmar, currency weakness was due to the economic paralysis which followed the coup in 2021.”
Elsewhere in the region, Singapore’s position in ECA’s cost of living rankings remained unchanged from last year in spite of the city experiencing significant price rises in the past twelve months, with housing rental costs, utilities and petrol prices seeing particular growth.
Strong local currencies push Hong Kong and cities across mainland China up the list
Meanwhile, Hong Kong remains the most expensive city worldwide, even though prices have risen less in the Special Administrative Region compared to other similar locations worldwide.
“Year-on-year price increases of 3%, as measured by our basket of goods and services, are higher than what we typically see in Hong Kong. However, the hike in prices is lower than the rates in similar cities both within the region and globally,” said Quane. “Rather, it has been the strength of the Hong Kong dollar, which is pegged to the US dollar, in the past year which enabled the city to maintain its position as the most expensive location worldwide as other currencies have weakened.”
