The world’s most expensive cities are New York and Singapore, according to the Worldwide Cost of Living Index released by the Economist Intelligence Unit. This is the first time New York has topped the rankings. Last year’s number one, Tel Aviv, now ranks third.
Overall, the average cost of living in the world’s largest cities rose by 8.1% this year, the survey reports. The war in Ukraine and the impact of Covid-19 on supply chains were also identified as factors behind the increase.
High inflation in the US was one of the reasons why New York topped the list. It was also high in Istanbul, with prices up 86%, Buenos Aires (64%) and Tehran (57%). Moscow and St. Petersburg rose in the rankings from 88th and 70th to 37th and 73rd respectively, partly as a result of Western sanctions following Russia’s invasion of Ukraine.
The rise in petrol prices in cities was particularly strong but food, utilities and household goods are all getting more expensive for city-dwellers.Upasana Dutt, head of worldwide cost of living at EIU
Los Angeles and San Francisco ranked among the top 10 most expensive: earlier this year, US inflation was the highest in more than 40 years in that country. Other US cities, including Atlanta and Boston, account for six of the top ten global movers up the rankings, the report stated. Mexico City has also jumped upwards by 33 places, with the peso supported by Mexico’s own interest-rate hikes, which are tracking ahead of the Fed’s. The strengthening dollar was also a factor in the prominence of US cities.
The survey compares the US dollar costs of goods and services in 172 cities. Kyiv was not included in this year’s review. More than 400 individual prices were compared on more than 200 products and services in 172 cities around the world.
“The war in Ukraine, Western sanctions on Russia and China’s zero-Covid policies have caused supply-chain problems that, combined with rising interest rates and exchange-rate shifts, have resulted in a cost-of-living crisis across the world,” Upasana Dutt, head of worldwide cost of living at EIU, said in a media statement.
1. Most expensive cities
- New York
- Tel Aviv
- Hong Kong
- Los Angeles
- San Francisco
Other key findings of the report include:
- The most rapid increases in the Worldwide Cost of Living index were for the price of a liter of petrol, which has risen by 22% year on year on average in local-currency terms amid higher global oil prices and a stronger US dollar.
- Prices for gas and electricity have risen by 29% on average in local-currency terms in western European cities as the region tries to wean itself off Russian energy. This compares with a global average increase of 11%.
- Inflation for food and household goods has also been high amid trade restrictions, caused partly by the war in Ukraine. By contrast, prices for recreational goods and services have been subdued in local-currency terms; this may reflect softer demand as consumers focus spending on essentials.
“We can clearly see the impact in this year’s index, with the average price rise across the 172 cities in our survey being the strongest we’ve seen in the 20 years for which we have digital data,” Dutt said.
2. Least expensive cities