‘Dollar peg, lower prices kept HK living costs down’

An economist behind an annual cost-of-living survey has said that the Hong Kong dollar’s peg to the US currency, as well as cheaper prices for clothing and services such as haircuts, helped push the SAR off the top of an annual list of the most expensive places to live.

Simon Baptist, chief economist at the Economist Intelligence Unit, made the comment on RTHK’s Backchat programme a day after the unit published its annual Cost of Living Index. The index ranked Hong Kong as the fifth most expensive place to live, down from joint first in the previous survey.

“With the US dollar remaining weak through the last six months or so, that means the price of locally produced services, that are priced in Hong Kong dollars, and when we transfer those into an internationally comparative context, they are now relatively cheaper, in the global scene, because of the weaker US dollar.”

Baptist said the unit had seen lower prices for clothing in Hong Kong, as well as for personal services, notably the cost of a haircut.

He said places that had seen relatively fewer lockdowns had seen price rises, such as Tel Aviv and Auckland, though Hong Kong was an exception to that rule, partly because it had fewer travellers than before the pandemic.

Hong Kong had shared top spot in the 2020 survey with Paris and Zurich. Paris and Singapore were in joint second second this year with Zurich in fourth.

Baptist said it was difficult to compare the cost of buying property between different cities.