Dot Property Malaysia

Currency corrections see cost of living for expats fall in Southeast Asia

The cost of living for expats has declined in many parts of Southeast Asia

The cost of living for expats in Bangkok, Hanoi and many other locations across Southeast Asia fell. That was due in large part to currencies weakening in several countries. According to the ECA International Cost of Living rankings, the Thai capital is now the 34th most expensive location for expatriates in the world while Hanoi dropped out of the top 100 altogether.

With the cost of living rising elsewhere globally, the ECA International rankings found Southeast Asia to benefit from lower rates of inflation in addition to weakening local currencies.

“Many Southeast Asian locations have fallen in our Cost of Living rankings. This is because other countries, which were previously ranked below these locations, had experienced higher rates of inflation, which drove up their positions on the list,” Lee Quane, Regional Director – Asia at ECA International, told Dot Property.

He continued, “This also came about as a result of Southeast Asian currencies weakening in comparison to other currencies such as the US Dollar. Thus, while prices may have increased in places like Thailand in local currency terms, the US dollar equivalent value of the surveyed items are lower in 2021 as compared to 2020.”


This is ultimately mixed news for expats in places like Thailand and Vietnam where the cost of living has soared over the past few years. While local prices for various goods and services may still be increasing, they are now cheaper when compared to other countries.

“Absolute living costs have not fallen in Southeast Asia as prices have risen across most countries in the region. The rate at which prices grew in the region was in line with the wider Asia Pacific region, and is similar to the rates of inflation witnessed in other regions such as Europe and North America,” Quane noted. “On the other hand, our research saw significantly larger increments in the prices of goods and services in Africa and Latin America locations, which tend to have high inflation rates historically.”

Quane cited Oslo as an example of this. The Norwegian capital overtook Bangkok on the ECA International Cost of Living rankings because price increases here where much greater than what occurred in the Thai city.

Looking ahead, Quane predicts the cost of living for expats across most parts of the world to continue rising.

“We believe that living costs will rise in the majority of countries throughout the remainder of 2021 and into 2022 and will continue to do so at a much higher rate compared to what we saw in our recent research. This is partly due to increases in commodity prices such as oil. It is also reflective of supply shortages of other items, combined with a demand for goods and services that are associated with economic recoveries,” Quane stated. “Countries with considerable manufacturing bases, such as Thailand and Vietnam, may therefore see a greater inflationary impact as compared to other locations in the region.”

The impact of COVID-19 on the cost of living for expats

Remote work has become part of everyday life for many employees. With a desk or physical office no longer a barrier, a growing number of people are now looking to base themselves in places like Thailand and Vietnam.

“The growing trend of remote working has become increasingly appealing to many for various reasons. Notably, locations in Southeast Asia, particularly those in Thailand, have surged in popularity amongst remote workers, on the account of the relatively low cost of living, combined with the good infrastructure and connectivity capabilities they are able to obtain,” Quane said.

And while the low cost of living for expats may prove to be attractive, there are other factors which need to be considered.

“There are various compliance and logistical matters which may hinder people’s ability to realize this shift in the short-to-medium term,” Quane pointed out. “These include immigration and work permit issues, as it is difficult for non-residents to enter many countries in Asia at the present, or obtain a work permit without the sponsorship of a company in the host country.”

Meanwhile, traditional businesses will need to be mindful of just how COVID-19 has changed what employees expect when working overseas.

“The pandemic is likely to have resulted in employees placing greater emphasis on healthcare benefits, and they are now more likely to demand for more comprehensive coverage from their employers, especially in terms of their ease of access to good-quality medical care in the locations from which they are based,” Quane said. “Similarly, housing is also expected to be a pressing issue in the new normal, as the expected increase in hybrid working arrangements would lead to a greater demand for more spacious accommodation that can facilitate home-working or even home-schooling when the situation calls for it.”

Ultimately, companies need to adjust to these demands either by fulfilling them directly or offering higher salaries so employees can cover the additional costs themselves.