Connexion: Earn in KL and Spend in Ipoh

By Joachim Ng

The nation’s Millennials (24-38 years old) have gleefully welcomed the dawn of 2019, while much older folks are probably slightly worried that they have aged one more notch. But unless you are a crazy rich Asian, your pocket will stay quite empty. Prices are high, except for luxury goods. Last month, one newspaper headlined a report that Kuala Lumpur is “the least expensive city to stay in Asia”. If you read only the headline you could be misled, for the story talks about such untouchables as the Cartier Love Bracelet.

In fact, KL is an expensive city for middle-income ringgit earners. A useful measure of your spending power is the Big Mac Index 2018. The price of a Big Mac in Malaysia is listed as US$2.10. To use the index, convert $2.10 into ringgit. That’s RM8.70. Assuming your monthly income is averagely RM100 per day, a Big Mac costs 8.7% of your salary. In Singapore, the price is US$4.28. That’s S$5.80. For a Singaporean worker earning S$100 average daily, a Big Mac costs only 5.80% of his salary. Most goods (with the notable exception of cars) are cheaper for him than for a ringgit earner in KL.

Let’s cast our eyes farther — Australia. A Big Mac is US$4.52. That’s A$6.20, meaning, an Australian worker taking home a daily A$100 needs to spend 6.2% of his salary on the Big Mac for lunch. At 6.20, Australia is cheaper than Malaysia at 8.70. But what about Aussie cars? Aren’t they priced like pink diamonds? Pink roses maybe, as a 1.8-litre sedan will be just A$25,000. In Malaysia it will be at least RM125,000. Five times more!

What about the stuff for daily living? Displayed in the table below is a mini-selection with price comparison of same-quality items at supermarkets in Kuala Lumpur, Ipoh, and Brisbane.

KL prices for all items are higher than Ipoh and Brisbane. Ipoh is cheaper than Brisbane in only two items. You could do a selection of 50 same-quality items across supermarkets in the three cities and the result would be much the same. KLites are well advised to make Ipoh their favourite destination for weekend lunch and shopping.

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