Paris number one in worldwide cost of living survey
Zurich, Paris and Hong Kong have all been listed as joint first place in the most recent annual Worldwide Cost of Living survey conducted by the Economist Intelligence Unit.
Three European cities in top 10
Paris, which also came out on top last year joins fellow European cities in the top 10 – Geneva and Zurich, in Switzerland, out of the 130 plus cities that were ranked in the biennial survey.
Asian cities also have high costs
Asia also has multiple entries in the top 10, with Osaka in Japan as well as Hong Kong and Singapore.
New York, USA, was placed eighth, Tel Aviv, Israel in fifth and Los Angeles, USA, at ninth.
The survey compares the cost of more than 400 common items, including bread, beer, clothing and haircuts, across 160 products and services. These include food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs.
Paris ‘extremely expensive to live in’
Report author Roxana Slavcheva says, “The French capital remains extremely expensive to live in, with only alcohol, transport and tobacco offering value for money compared with other European cities.
“European cities tend to have the highest costs in the household, personal care, recreation and entertainment categories—with Zurich and Geneva the most expensive in these categories—perhaps reflecting a greater premium on discretionary spending.”
All cities are compared with the benchmark city of New York, which has an index set at 100. The top three had an index of 107. The survey has been carried out for more than 30 years.
Caracas has lowest cost of living
One of the least expensive cities was Caracas in Venezuela, as well as declines experienced in Rio de Janeiro and Lusaka. The drop is largely down to raised poverty levels in Latin America as well as weak currency levels.
Effects of a stronger US Dollar
A stronger US Dollar has seen United States cities becoming more expensive globally over the years, despite New York dropping 3 places in 2020 and Los Angeles falling one place. Regardless of the decrease, there have been some sharp increases in the relative cost of living in the US compared with Six years ago, when New York and Los Angeles tied in 39th place. Domestic help and utilities remain expensive in North America, with US cities ranking highly in these categories.
The highest climbers were Tehran, moving 27 places, Perth, Guangzhou, Belgrade and Abidjan, all up 12 places. Tehran’s impressive leap in the rankings comes amid US sanctions, which have created supply chain issues, stopping imports in several categories.
Inflation and currency devaluation
The Cost of Living survey reveals that inflation and currency devaluation caused cities in Sao Paulo, Rio de Janeiro and Bangkok to fall down the rankings.
Reykjavik has biggest fall
Reykjavik in Iceland, which experienced the sharpest decline in the cost of living ranking in the past 12 months, fell by 27 places, with many of the declining countries experiencing falls in disposable income as a result of COVID-19. Many businesses have suffered with many citizens only purchasing essential items and opting for less expensive products during the pandemic.
Average cost of living falling
The impact of high inflation and currency denominations is also reflected in the average cost of living falling this year. Whilst tobacco and electronics have seen the biggest price increases, with some Australian cities seeing double digit increases, clothing and utilities have experienced significant decline during the pandemic.
Groceries expensive in Asian cities
Asian cities tend to be the priciest locations for general grocery shopping, while European cities tend to have the highest costs for household, items personal care, recreation and entertainment.
Political and economic shocks
Despite Brexit and the COVID-19 pandemic, the report forecasts that much of the results seen in the 2020 Worldwide Cost of Living survey will continue into 2021. It is thought that global economies will not return to pre-pandemic levels until 2022.
It’s predicted that some of the biggest price increases will continue to affect electronics, particularly smartphones and laptops, as well as groceries. The fate of economies, however, will largely depend on the state of future lockdowns and how frequently businesses will have to shut their doors in 2021. Naturally, it’s thought that online marketplaces and supermarkets will continue to do well, particularly Amazon, Walmart and Costco.