Which Asian countries have the lowest price levels? What World Bank data shows

What a price level ratio measures, and what it leaves out

The International Comparison Program, run through the World Bank, produces purchasing power parities and comparable price level indexes for participating economies. The 2021 cycle results were released in May 2024. The program describes itself as one of the largest, and most enduring, statistical initiatives in the world.

A price level ratio compares a country's purchasing power parity conversion factor with the market exchange rate. A ratio of 1.00 means that the economy's general price level matches the United States, and 0.30 means that the same overall basket of goods and services costs about 30 per cent as much when measured at market exchange rates. We calculated the ratios below by dividing the World Bank's GDP PPP conversion factor by its official exchange rate for each country and year.

That basket covers the whole economy, including government services, construction and local labour. Wikipedia's article on purchasing power parity describes non-traded goods such as housing and services (its example is haircuts) as priced locally, and says PPP is poor for measuring the relative cost of goods and services in international markets. A national ratio is therefore a measure of the whole economy, not of what a visitor would spend.

Price level ratios for Asian economies, 2021 and 2023

The table shows selected economies in South, Southeast and East Asia, with the United States as 1.00. We use 2021 as the main year because it is the ICP benchmark, when prices were actually compared. The 2023 column is a later estimate from the same World Bank series, and exchange-rate swings can move it considerably, so it is a cross-check rather than a replacement.

Three groups stand out. Pakistan, Nepal, Sri Lanka and India have the lowest ratios in 2021, between 0.27 and 0.28. A second group, including Vietnam and Laos at 0.31 and Bangladesh at 0.33, Indonesia at 0.34, Cambodia and Thailand at 0.35, Malaysia at 0.37 and the Philippines at 0.39, sits just above. Singapore, China, South Korea and Japan are in a different league at 0.60 to 0.90.

Central Asia and the Caucasus also show low ratios, with Tajikistan at about 0.22, and Kyrgyzstan and Uzbekistan at about 0.24 in 2021. We leave them out of the table because most travellers and expats think of South, Southeast and East Asia when they say Asia, but the data is there if you want it.

South Asia and Nepal: low ratios, different daily lives

Nepal is a federal parliamentary republic of about 31 million people with Kathmandu as capital and largest city and Nepali as its official language. Its elevation runs from about 60 metres on the Terai plains to 8,848 metres at Mount Everest, and it has five climatic zones tied to altitude, from tropical and subtropical below 1,200 metres to arctic above 4,400.

India's low ratio sits alongside enormous variation between cities and states, which a national figure hides. Our pages for India include Bengaluru, one of the Indian cities we cover. Read safest country in Asia for a separate view of safety, since a low price level says nothing about it.

Pakistan and Sri Lanka also appear at the bottom of the table, but note how much their 2021 and 2023 figures differ in places. That is why we treat the benchmark year as the anchor.

Southeast Asia: Vietnam, Thailand, Malaysia and neighbours

Vietnam has about 102 million people, Vietnamese as its official language, Hanoi as capital and Ho Chi Minh City as its largest city. It is a unitary communist state. At 0.31 in 2021 and 0.29 in 2023, it sits near the bottom of the Southeast Asian range. See Vietnam, Da Nang and long-stay apartments in Hanoi.

Laos is a unitary communist state with Lao as the official language, Vientiane as capital and largest city, and a tropical savanna climate shaped by the monsoon, with rain from May to October and a dry season from November to April. Its ratio of 0.31 in 2021 fell to 0.22 in 2023, one of the biggest drops in the table, which shows how much the ratio can move between years.

Thailand, Malaysia, Indonesia and the Philippines are covered by our city pages. Compare Chiang Mai with long-stay stays in Bangkok, and Kuala Lumpur with Indonesia and the Philippines. A national ratio will not tell you that a capital differs from a provincial town. For a regional view, see aparthotels in Asia for long stays.

Why the cheapest ratio is not the cheapest place for you

A ratio of 0.27 does not mean you will spend 27 per cent of what you spend at home. The ratio covers the whole economy, so the mix of what you buy decides how much of the gap you would feel.

Quality and availability matter too. Healthcare, internet reliability, air quality and the ease of dealing with administration are not in a price index, and a price index says nothing about them. Countries with the best healthcare for expats covers one of those gaps.

The IMF uses ICP PPP estimates in its own work, including its World Economic Outlook, which is a sign of how widely the data is used. It is a good comparison tool and a poor budget tool.

• Use the ratio to compare economies, not to forecast your monthly spending.
• Compare cities, not just countries: a national ratio cannot show differences within a country.
• Check that you can get what you rely on, such as healthcare, internet and a home that suits your needs.
• Stay a few weeks before committing; see monthly serviced apartments.