The Economist’s Intelligence Unit (EIU) has published this year’s Worldwide Cost of Living Report, revealing which cities around the world are the most expensive to live in, which ones are the least expensive, and major changes in the ranking compared to last year.
Comparing more than 400 individual prices across more than 200 products and services in 173 cities, the survey reveals that, on average, prices have risen by 7.4% year on year in local-currency. This marks a decline from the record 8.1% increase reported last year, but price growth remains significantly higher than the trend in 2017-21.
The cost-of-living crisis is hardly over and price levels remain much above historical trends.
Upasana Dutt, Head of Worldwide Cost of Living at EIU
“The supply-side shocks that drove price increases in 2021-22 have reduced since China lifted its Covid-19 restrictions in late 2022, while the spike in energy prices seen after Russia invaded Ukraine in February 2022 has also eased. However, the cost-of-living crisis is hardly over and price levels remain much above historical trends”, explained Upasana Dutt, Head of Worldwide Cost of Living at EIU.
This year, Singapore keeps its top-ranking position as the world’s most expensive city to live in, for the 9th time over the past 11 years. The first place is shared with Zurich, which climbed up from 6th place last year. New York US, which came joint first last year, moved down to second, tying with Geneva in second place.
Overall, the top ten this year consists of two Asian cities (Singapore and Hong Kong), four European cities (Zurich, Geneva, Paris and Copenhagen), three US cities (New York, Los Angeles and San Francisco) and Tel Aviv in Israel. EIU however mentions that the survey was conducted before the start of the Israel-Hamas war, which has affected the exchange rates in Israel and may have made it harder to procure some goods in Tel Aviv, thereby affecting prices.
“We expect inflation to continue to decelerate in 2024, as the lagged impact of interest-rate rises starts affecting economic activity, and in turn, consumer demand. But upside risks remain – further escalations of the Israel-Hamas war would drive up energy prices, while a greater than expected impact from El Niño would push up food prices even further”, Dutt added.
Santiago de Querétaro (Mexico), Aguascalientes (Mexico) and San José (Costa Rica) are the three biggest upward movers, jumping 48 places to 51st, 39 places to 82nd and 38 places to 70th respectively. Central banks in much of Latin America were among the first to follow the US Federal Reserve’s interest-rate rises, in order to support their currencies, EIU explains. As a result, the Mexican peso and the Costa Rican colón had both appreciated against the US dollar. Moreover, prices have also been buoyed by strong inward investment, particularly in Mexico.
On the other hand, Russia’s Moscow and St Petersburg fell the most, 105 places to 142nd and 74 places to 147th respectively. Although prices have risen in both cities (by 5.9% and 6.6%) amid import suppression and labour shortages, the sanctions imposed on Russia for invading Ukraine have depreciated the rouble by about 60% since last year.
At the bottom of the ranking, Damascus remains the least expensive city to live in, despite a year-on-year rise in the cost of living of 321% (in local currency).
1. Most expensive cities to live in
1. Singapore (Singapore), Zurich (Switzerland) – Index score 104
3. Geneva (Switzerland), New York (USA) – Index score 100
5. Hong Kong (Hong Kong) – Index score 98
6. Los Angeles (USA) – Index score 97
7. Paris (France) – Index score 91
8. Copenhagen (Denmark), Tel Aviv (Israel) – Index score 89
10. San Francisco (USA) – Index score 86
2. Least expensive cities to live in
173. Damascus (Syria) – Index score 13
172. Tehran (Iran) – Index score 20
171. Tripoli (Libya) – Index score 23
170. Karachi (Pakistan) – Index score 28
169. Tashkent (Uzbekistan) – Index score 31
168. Tunis (Tunisia) – Index score 32
167. Lusaka (Zambia) – Index score 33
166. Ahmedabad (India) – Index score 34
165. Lagos (Nigeria) – Index score 35
163. Chennai (India), Buenos Aires (Argentina) – Index score 37
