Singapore is a highly developed country, so there’s this assumption that the cost of goods and services here is far higher compared to those in other countries in the same region. This popular belief is compounded by the fact that in its Worldwide Cost of Living 2021 survey, the Economist Intelligence Unit (EIU) ranked Singapore as the second most expensive city in the world, tied with Paris and second only to Tel Aviv.
But Is It Really More Expensive to Live in Singapore?
It should be noted that the said survey is designed to help human resource managers prepare the appropriate cost of living and compensation packages for business travellers and expatriates who will be assigned to the countries that were studied. The consumption pattern of these individuals can be quite different from that of a regular household, which is why the result of the survey does not necessarily reflect the cost of living Singapore residents typically have to budget for.
The Consumer Price Index (CPI) is a better reference for determining a country’s cost of living. The Singapore government regularly measures and publishes the average price changes in a fixed set of goods and services that a typical household would consume and use. The index is also widely used as the standard for measuring consumer price inflation. Based on the CPI, the prices of goods and services in the country rose by 2.3% in 2021. Considering that the rest of the world is also experiencing higher-than-usual inflation rates, the rise in the cost of living in Singapore is par for the course.
At first glance, Singapore may seem inaccessible to those who are working with a tight budget, but the cost of living and conducting business in the city-state can be surprisingly affordable. Here are some of the expenses in the country that people will find to be more budget-friendly than they initially expected.
Cost of Doing Business
There are plenty of government-backed grants and programs that companies can count on to help them get their business ideas off the ground or expand their operations in Singapore. These include Startup SG for new entrepreneurs and sector-specific assistance programs like Agri-Food Cluster Transformation (ACT) Fund for local food-producing companies and Healthier Dining Grant for companies in the food and beverage sector that want to offer healthy food options. Foreign entrepreneurs can also access programs that will make it easy for them to operate a new business in the country. The EntrePass, for example, will provide entrepreneurs with a 1-year pass. The Global Investor Programme (GIP), on the other hand, awards Permanent Residence status to entrepreneurs who invest at least SGD 2.5 million in a new or existing business in Singapore.
The cost of a basic health insurance plan in Singapore is comparably lower than that in other countries. Singaporeans and Permanent Residents are eligible for MediShield Life, which is a plan that offers tiered premiums and subsidies depending on household income. For foreigners who are living in Singapore, there are a variety of health insurance plans with reasonable premiums that cover a wide range of emergency and regular medical needs.
An intangible representative of Singapore’s rich multicultural heritage, hawker food remains reasonably priced. Hawker centres are a part of everyday life in Singapore, and the food items and sets that hawkers serve their customers are still affordable, accessible, and highly appreciated among the general public. Only about 22% of Singaporeans cook daily at home, with a significant portion of the population depending on the thriving local food service industry–which includes hawkers–for their everyday meals. Tourists and residents who want to eat delicious, filling, and healthy meals can easily find plenty of options in Singapore that will suit their budget and satisfy their cravings.
Singapore has a very efficient public transportation system and pedestrian- and bike-friendly roads. More than that, the country also has one of the most affordable public transportation systems, with a single trip using a bus in the country costing but a small fraction of what it would cost in other major cities around the world. While passengers in Singapore have to deal with surcharges when taking a taxi, the fare here is still much cheaper than what one can expect from thriving cities like Tokyo, London, and New York. Also, passengers in Singapore don’t need to give their drivers a tip, something that is customary in the US.
For a country with a host of strong national safety net programs, Singapore has low taxes. Unless a person is a part of the 20% of the highest earners in the country, they’ll hardly feel the weight of paying their taxes. Singapore collects Goods and Services Tax (GST) and people may complain about this once in a while, but for the most part, the taxes for consumers and businesses alike are competitive enough to attract more companies to set up a base of operation in the country.
While Singapore residents are enjoying high standards of living, this doesn’t mean that the country is as expensive as it initially seems. The city-state has plenty to offer people with different tastes and budget ranges, no matter if they’re residents or if they’re simply travelling to Singapore for business or leisure.