Currently, Singapore is ranked 24th most expensive destination in the world while Malaysia sits at the 212th spot.
The ECA had been conducting research into the cost of living for over 45 years and carried out two main surveys in March and September every year. Certain living costs such as house rental, car purchases and school fees are usually covered by separate allowances. Data for these costs are collected separately and not included in the cost of living basket.
Multinational companies are pulling staff out of Singapore and relocating to Malaysia to cut costs, in a further sign of the damage being inflicted on the city-state.
Businesses that have relocated to the Malaysian capital of Kuala Lumpur over recent years include McDermott, Technip, and Subsea 7.
Singapore is one of the world’s most expensive places to own a car due to high registration fees and taxes, and the steep cost of a “certificate of entitlement” to own a car. Singapore auctions these certificates as a measure to curb the growth of vehicle ownership.
The engineering companies also cite the advantage of being closer to customers in Malaysia’s offshore oil and gas sector.
In addition to these factors, one oil industry insider said the slump in the value of the ringgit last year had made relocation to Malaysia more attractive, sharpening the difference in costs with Singapore.
Malaysia is increasingly seeking to compete with Singapore to seize opportunities in Asia’s oil, gas and petrochemicals markets.
Petronas, the Malaysian state oil and gas company, is building a refinery in the southern state of Johor, which borders Singapore. The city-state is one of the world’s top three refining centres despite producing no oil or gas of its own.
The moves by multinationals are adding to the pain Singapore has suffered during the oil price drop. Companies in Singapore’s offshore marine sector, a key part of the island’s economy, have slashed their workforce.