Most expensive cities in the world in 2022
New York and Singapore have topped the list of the most expensive cities to live in, said a survey by the Economist Intelligence Unit's Worldwide Cost of Living (WCOL).
According to the survey, the cost of living in 172 of the world's major cities rocketed an average 8.1% over the past year, driven by factors including the war in Ukraine and supply-chain snarls.
Petrol prices have seen the most rapid increases, but utility and food prices have also increased sharply.
However, high inflation is not the only factor that drives the WCOL's annual ranking of the world's most expensive cities. A stronger currency will tend to see a city rise in the rankings, as prices are higher when expressed in international common currency. Structural factors such as competition or high demand play a key role in determining the cost of living as well.
This year has seen the dollar strengthen against many currencies as the Federal Reserve (US central bank) raises interest rates, per the findings.
Top ten cities: Singapore, New York US, Tel Aviv Israel, Hong Kong Hong Kong, Los Angeles US, Zurich Switzerland, Geneva Switzerland, San Francisco US, Paris France, Copenhagen Denmark, Sydney Australia.
New York toped the rankings for the first time, tying with frequent leader Singapore, which is back in pole position for the eighth time in ten years, the report showed. In addition to New York, Los Angeles and San Francisco moved into the top ten.
Both the cities have bumped Tel Aviv, which topped last year, down into third place. Hong Kong and Los Angeles rounded out the top five priciest places.
The report also showed the ranking of Russian cities of Moscow and St Petersburg shot up by 88 and 70 places respectively as Western sanctions lead to higher prices, and buoyant energy markets and financial restrictions support the rouble.
Biggest movers up the ranking: Moscow Russia, St Petersburg Russia, Atlanta US, Charlotte US, Indianapolis US, San Diego US, Mexico City Mexico, Saipan Northern Mariana Islands, Portland US, Boston US.
Meanwhile, local prices have been driven upwards by Western sanctions imposed after Russia invaded Ukraine in February 2022. According to the survey of prices, inflation in Moscow is now 17.1% year on year in local-currency terms, while in St Petersburg it has reached 19.4%.
Botom ten positions: Colombo Sri Lanka, Bangalore India, Algiers Algeria, Chennai India, Ahmedabad India, Almaty Kazakhstan, Karachi Pakistan, Tashkent Uzbekistan, Tunis Tunisia, Tehran Iran, Tripoli Libya, Damascus Syria.
"The cheapest cities in the rankings are Damascus, Tripoli and Tehran, reflecting these countries' weak economies and currencies. Damascus and Tripoli, which are often at the bottom of the WCOL rankings, have seen only moderate local-currency inflation over the past year. In calculating Tehran's index this year we decided to use the more widely used realistic parallel-market exchange rate, instead of the overvalued official exchange rate. As a result, Tehran is now the third-cheapest city in our comparative ranking, while it ranked much higher last year," read the survey.
Biggest movers down the ranking: Stockholm Sweden, Luxembourg Luxembourg, Lyon France, Osaka Japan, Manchester UK, Nouméa New Caledonia, Brussels Belgium, Douala Cameroon, Busan South Korea, Tokyo Japan.
"Of the top ten biggest fallers in our rankings, European cities such as Luxembourg and Stockholm account for five. While inflation in Europe has risen, the energy crisis that has followed Russia's invasion of Ukraine is tipping the continent into recession and depreciating currencies against the US dollar and therefore reducing the indices for some European cities. In late August the euro fell below parity with the dollar for the first time in 20 years. Japan and South Korea have also seen currency depreciation, while local-currency inflation in these countries is fairly subdued; this has pushed down the indices for Tokyo and Seoul compared with New York," the report added.
The survey, which was carried out in August and September this year, compares more than 400 individual prices across over 200 products and services in 172 cities globally.
Upasana Dutt, who headed the research said, "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," reports Live Mint.
The report made an optimistic prediction saying the price increases are set to ease in 2023.
"The good news is that prices may be starting to ease in some countries as interest rates bite and the global economy slows. Supply-chain blockages should also start to ease as freight rates come down and demand softens. Unless the war in Ukraine escalates, we predict that commodity prices for energy, food and for supplies such as metals are likely to fall sharply in 2023 compared with 2022 levels, although they are likely to stay higher than previous levels. Overall, EIU forecasts that global consumer price inflation will fall from an average of 9.4% this year to a still-high 6.5% in 2023. We expect this partial drop to be reflected in next year's WCOL survey, bringing a little relief to hard-pressed households," it added.
