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Friday, Oct 07, 2022

Hong Kong once again named the most expensive city for expatriates

Hong Kong once again topped the rankings as the most expensive city for expatriates, with many prices rising quickly after slower growth in 2020 amid the Covid-19 pandemic, a survey found.
A research firm ECA International combined their cost-of-living research and accommodation research to enable a comparison of costs faced by expatriates around the world in 208 cities in 121 countries and territories.

According to ECA, Hong Kong topped the global rankings this time -- the same as last year. Geneva, Switzerland is second, with Tokyo in third place as New York falls out of the global top three.

Lee Quane, Regional Director of Asia at ECA International, said, "Hong Kong is consistently towards the top of the table, and this year was no different with prices increasing by 2.7 percent overall in local currency."

He said that the increase mainly came from the 15 percent increase in fuel prices year on year.

"But it is still three percent lower than the overall global price increase," Quane said.

He said that the city's economy has seen a recovery of sorts after a turbulent few years caused by the Covid-19 pandemic and political and social upheaval before this, and the increase in local prices reflects this.

"Rising fuel prices have led to price hikes in dining out and electrical products," Quane said. "Meanwhile, among all the goods surveyed, there was no significant increase seen in the prices of general products."

He added that the quarantine policies did not affect the price of products and services, whereas the travel ban and work-from-home arrangements following the Omicron variant would be factors affecting prices and exchange rates.

He reminded that shipping costs from Asia to Europe and the US would drive inflation in the long run and that product and service charges are expected to rise in the future to cover shipping cost increases.

In addition, Quane said that salary increases may be another factor of rising prices.

Ten of the top 20 most expensive locations globally are Asian cities, as Chinese cities move up the rankings.

Chinese cities all rose in the latest rankings, with four in the top 15 and Shanghai and Guangzhou both entering the global top ten.

"Chinese cities have seen a rise in the rankings on the back of a strengthening of the Chinese yuan and relatively high rates of price increases," Quane said.

He said that the Chinese currency has strengthened against all other major currencies thanks to a rebound in the demand for Chinese goods after a Covid related lull at the beginning of 2020, and this means that these cities are now more expensive for overseas workers compared to previously.

"Additionally, inflation in China has also picked up this year thanks particularly to rising fuel prices," he added.

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