In recent news affecting everyone feeling the financial squeeze, the ongoing global cost of living challenge persists, especially hitting those in big cities hard. This has given us a list of the world’s most expensive cities in 2023.
As per the yearly report from the Economist Intelligence Unit (EIU) called the Worldwide Cost of Living Index, the average cost of living went up by 7.4% this year. Notably, grocery prices saw the fastest increase.
Slowing down of price hikes
While the 7.4% increase this year is a bit less than the 8.1% jump noted in the 2022 survey, it’s still notably higher than what we usually see in the history of these trends. On a positive note, utility prices, which saw the quickest rise in the 2022 survey, experienced the least inflation in the current findings.
The slowdown in price hikes is linked to the easing of supply chain issues following the lifting of China’s Covid-19 restrictions in late 2022. Despite this, grocery prices continue to climb as retailers transfer higher costs to consumers.
Upasana Dutt, Head of Worldwide Cost of Living at EIU, stated, “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.”
However, Dutt cautioned about potential risks, highlighting the impact of armed conflict and extreme weather. She emphasized that further escalations in the Israel-Hamas conflict could spike energy prices, and an unexpectedly severe El Niño could further drive up food prices.
The rise in living costs has inevitably led to increased expenses in many cities, though the extent varies, with some cities being hit harder than others.
Most expensive cities in the world
Singapore and Zurich in Switzerland have been identified as the most expensive cities globally. Zurich’s climb from sixth place in the previous year’s ranking is credited to the strong Swiss Franc and elevated prices of groceries, household items, and recreation. Singapore’s high costs are associated with expensive transportation and clothing.
In the latest ranking, New York, which shared the top spot with Singapore last year, slipped to third place. This drop is despite a 1.9% increase in prices in the city, as indicated by the study. New York now ties with Geneva in Switzerland for the third position.
Hong Kong, the sole other Asian city in the top 10, secured the fifth spot. Following closely are Los Angeles at sixth place and Paris at the seventh spot.
Tel Aviv in Israel and Copenhagen in Denmark jointly hold the eighth position. It’s important to note that the survey was conducted before the October outbreak of the Israel-Hamas conflict. San Francisco, one of three U.S. cities in the top 10, wraps up the list in the tenth spot.
Some of the least expensive cities
Moscow and St. Petersburg in Russia experienced significant drops in the ranking, falling 105 places to 142 and 74 places to 147, respectively. This decline is attributed to the considerable drop in the value of the ruble following Russia’s invasion of Ukraine in February 2022.
Chinese cities, including Beijing, which held the 34th position last year, slid down the list due to factors such as the slow post-pandemic recovery and “subdued consumer demand.”
Damascus in Syria maintains its position as the world’s least expensive city. Tehran in Iran and Tripoli in Libya are also among the lowest, ranking 172nd and 171st, respectively.
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SWITZERLAND | 🔴💰Singapore and Zurich have both become the world’s most expensive cities in 2023, a survey by the Economist Intelligence Unit has found. The list also includes Geneva, New York, Hong Kong, as well as Paris, Tel Aviv and Copenhagen.
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In U.S. cities, utility, domestic help, and tobacco costs were notably high, while Western European cities stood out for being among the most expensive in recreation, transport, and household goods. According to the survey, Asian cities incurred the highest expenses for groceries and alcohol.
The 2023 Worldwide Cost of Living survey covered 173 major cities, analyzing over 400 individual prices across 200 products and services. Notably, Venezuela’s Caracas was excluded from the study due to a substantial 450% price increase since 2022.