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Do global cost of living stats really help expats?

Dozens of companies regularly release global cost of living data, but does the information really help expats on assignment with their budgets?

Each index lists a basket of goods and services for each city or country and tracks price changes in real time.

The data shows how exchange rates and inflation interact at any time.

The aim is to help companies equalise remuneration packages between countries, so expats are not financially rewarded or penalised for working overseas.

Currency exchange rates are directly linked to prices, but as exchange rates are more fluid than price changes, it’s essential to review them regularly.

What Rate Changes Mean

When home country rates change, the host country rate changes with them.

If the home rate drops against the host country, the index is pushed up as more home currency is needed to buy goods and services in the host country.

Should the home currency rate rise against the host country’s currency, less home currency is needed to buy the same amount of goods and services.

Most cost of living indices are based on the prices of a basket of goods and services that expats buy day-to-day.

If the prices change, the cost of living index follows them. When prices go up more in the host country than in the home country, the index rises, while if they rise more in the host country than the home country, the index drops.

The Surprise Element

The surprise element is many expats are often detached from what’s happening to the cost of living in their home country but see the index dropping while the prices are rising in the host country’s shops.

That’s how the index works – changing as exchange rates and prices rise and fall at home and overseas.

Numbeo is a cost-of-living comparison site with thousands of expats worldwide contributing to the dataset, which covers most countries.

The drawback is the index only returns current data, so expats can only compare periods if they have kept a separate record.

However, the site does let users edit their shopping basket to a limited extent.

The website gives live comparison data between two cities.

London v Singapore Compared

A comparison between London, UK, and Singapore shows prices for individual items or a grouping of items, such as restaurant prices.

For example:

  • Consumer prices in Singapore are 5.6% higher than in London (without rent)
  • Consumer prices, including rent, in Singapore are 12.2% higher than in London
  • Rent prices in Singapore are 21.5% higher than in London
  • Restaurant prices in Singapore are 35% lower than in London
  • Groceries in Singapore are 27.4% higher than in London
  • Local purchasing power in Singapore is 13.4% higher than in London

Numbeo says: “You would need around £6,729.8 (S$11,171.9) in Singapore to maintain the same standard of life that you can have with £6,000.0 in London (assuming you rent in both cities).”

It’s a good idea for expats to capture the cost of living comparison on the day they arrive in a host country to start a new assignment and to update the data every month. After a while, this offers the pricing evidence needed to negotiate a change in remuneration.

Where To Find Expat Cost Of Living Data

Many websites offer expat cost of living comparisons besides Numbeo, which is free to use.

  • Expatistan – A giant searchable site with over 3 million pieces of data covering 2,200 cities in 229 countries. Data comparison is free, but other services, like an expat salary calculator, come with a small charge.
  • – More of the same as Numbeo and Expatistan, with data from expats in 9,274 cities in 197 countries.

Other websites offering global cost of living indices are ECA International and Mercer. Both are large commercial organisations for multinational companies. Some data is free, but much comes with a hefty price tag. The sites are set up for employers rather than expats on assignment.

Besides cost-of-living comparisons, these websites offer insights into property prices, pollution, quality of life and other aspects of living overseas for expats.

Regionalising Economies

Geopolitics presents another factor to consider for expats when comparing cost of living prices.

Financial experts have spotted a trend to regionalise prices and inflation. ECA International points out that inflation growing at the same rate is a global trend; comparing prices is more straightforward than when regions and countries have different rates.

For example, prices are falling, and the yuan is weak in China, thanks to a poor response to reviving the economy after the COVID-19 pandemic. The problem is a price comparison shows a drop in the cost of living that is likely to take months to play out, which means expats will see home prices rise, committing less home currency needed to maintain living standards in China.

This change of fortune does not mean wages are being cut but that the price comparison monitor is working to ensure wages at home and in the host country equalise.

Cost-Of-Living Trackers Compared

Here are the top 10 most expensive countries for expats compared between four expat cost-of-living websites.

The results are similar, with Switzerland and Singapore on each, while the Cayman Islands, Bahamas, Denmark and the USA feature on three.

RankNumbeoExpatistanLiving CostMercer
3Cayman IslandsBahamasCayman IslandsUSA
4BahamasCayman IslandsSwitzerlandIsrael
7BarbadosHong KongLiechtensteinChina
8JerseyDenmarkUSASouth Korea

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