For many it is the greatest dream—to move to a big city and build a glamorous new life.
But living in a metropolitan city, as we all know, comes at a cost especially if you choose Hong Kong (China), Paris (France) or Zurich (Switzerland), which according to new research, are the most expensive cities in the world.
The three cities are tied at the top spot in the table by the Economist Intelligence Unit (EIU), which ranks 133 global cities based on the price of a basket of 138 everyday items.
Singapore, Osaka (Japan) and Hong Kong, which were in the first place in the previous Worldwide Cost of Living Survey carried out in March, have been overtaken by European cities.
This time around the changes are particularly evident, as the study is also a proof of the effect that the COVID-19 pandemic has brought about in the global markets.
Currency fluctuations due to the pandemic, including a decline in the US dollar, have meant that destinations in Africa, the Americas and Eastern Europe have become less expensive since March, although rates have risen in Western Europe, where the euro has risen against the dollar. The Swiss franc rose in value, too.
Tel Aviv (Israel) is tied with Osaka in fifth place while Singapore is now down to fourth position. According to the EIU, a mass departure of foreign workers during the pandemic is behind the decline in Singapore’s position, which saw its population dropping for the first time in 17 years.
Geneva (Switzerland), New York (US), Copenhagen (Denmark) and Los Angeles (US) complete the top 10. Sydney (Australia) is at number 15, London (UK) is at 20 and Nairobi (Kenya) is at 77. Moscow (Russia) is at number 106, while Delhi (India) is at number 121.
The biggest increase is witnessed by Tehran (Iran), which has climbed the ladder from 106th to 79th, owing to US sanctions impacting supplies. The largest price declines are seen in Reykjavik (Iceland), Rio de Janeiro (Brazil) and Sao Paulo (Brazil). The EIU attributes the rankings of Brazilian cities to “weak currency and increasing levels of poverty.” Moreover, during the pandemic, Brazil has suffered tremendously.
Damascus (Syria) is the city with the lowest cost of living, followed by Uzbekistan’s Tashkent, Lusaka in Zambia, Caracas (Venezuela) and Almaty in Kazakhstan.
Karachi (Pakistan), Buenos Aires (Argentina), Algiers (Algeria), and Bangalore and Chennai, in India, round out the bottom 10. During the pandemic, the Argentinian government implemented price controls, which might explain the status of Buenos Aires.
It wasn’t just the cities that switched around. The survey showed that electronics prices rose worldwide while clothing prices have declined. Both these trends could be due to the rise of people working from home. The price of staple food products remained relatively the same, while personal care products, tobacco and alcohol all increased.
“The COVID-19 pandemic has caused the US dollar to weaken while western European and north Asian currencies have strengthened against it, which in turn has shifted prices for goods and services,” said Upasana Dutt, head of worldwide cost of living at the EIU.
“The pandemic has transformed consumer behavior, as lockdowns and trends such as working from home have increased the prices of consumer electronics and meal-at-home kits have taken the place of restaurant dining for middle-class families,” she added.
As far as the future is concerned, things do not look rosy. The EIU expects that these trends will continue, with staples and home entertainment prioritized by people over items like clothing in 2021.
Economist Intelligence Unit
The Economist Intelligence Unit, headquartered in London, is the research and analysis division of Economist Group providing forecasting and advisory services through research and analysis, such as monthly country reports, five-year country economic forecasts, country risk service reports, and industry reports.