The global cost of living crisis is still going strong, and people living in big cities are feeling the impact. A recent report called the Worldwide Cost of Living Index, published by the Economist Intelligence Unit (EIU), shows that the average cost of living went up by 7.4% this year. The prices for groceries increased the most.
While this increase is a bit less than the 8.1% rise reported in 2022, it’s still much higher than what we usually see. However, there’s a bit of positive news. Utility prices, which rose the fastest in the 2022 report, increased the least this time. Moreover, the last report published according to a survey is the 10 most liveable cities in the world in 2023.
Inflation predictions
The rise in prices is slowing down because supply chain issues have eased since China lifted its Covid-19 restrictions in late 2022. However, grocery prices continue to go up as retailers pass on the increased costs to consumers.
Upasana Dutt, the Head of Worldwide Cost of Living at EIU, mentioned that they expect inflation to slow down in 2024. This is because the delayed impact of interest rate increases will start affecting economic activity and, consequently, consumer demand.
Dutt also warned about potential risks. Armed conflicts and extreme weather events could drive up energy and food prices. For example, further escalations in the Israel-Hamas war may increase energy prices, and a more significant impact from El Niño could push up food prices even more.
Due to the rising living costs, many cities have become more expensive to live in, with some being more severely affected than others.
The most expensive cities
Singapore and Zurich in Switzerland were named the most expensive cities globally. Zurich moved up from sixth place last year, mainly due to the strong Swiss Franc and high prices for groceries, household goods, and recreation. Singapore’s costly transport and clothing also contributed to its top ranking.
New York, which tied with Singapore for first place last year, slipped to third this year, tying with Geneva in Switzerland. Hong Kong was the fifth most expensive city, followed by Los Angeles at sixth and Paris at seventh.
Tel Aviv in Israel and Copenhagen in Denmark shared the eighth spot. 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, secured the tenth position.
Movers and shakers
Moving down the list, Russian cities Moscow and St. Petersburg experienced significant drops, falling 105 places to 142 and 74 places to 147, respectively, in this year’s ranking. The value of the ruble decreased notably since Russia’s invasion of Ukraine in February 2022.
The survey pointed out that slow post-pandemic recovery and “subdued consumer demand” were factors contributing to the decline of Chinese cities, including Beijing, which ranked 34th last year.
Damascus, Syria, maintains its position as the world’s cheapest city. Tehran, Iran, and Tripoli, Libya, are also near the bottom, ranking 172nd and 171st, respectively.
In U.S. cities, utility, domestic help, and tobacco costs were the highest, while Western European cities ranked among the most expensive for recreation, transport, and household goods. According to the survey, Asian cities topped the list for the highest costs in groceries and alcohol.
The 2023 Worldwide Cost of Living survey covered 173 major cities, comparing over 400 individual prices across 200 products and services. It excluded Venezuela’s Caracas, where prices have surged by 450% since 2022.
The World’s 10 Most Expensive Cities To Live
1. Singapore (tie)
1. Zurich, Switzerland (tie)
3. New York City (tie)
3. Geneva, Switzerland (tie)
5. Hong Kong
6. Los Angeles
7. Paris, France
8. Copenhagen, Denmark (tie)
8. Tel Aviv (tie)
10. San Francisco
The World’s 10 Least Expensive Cities To Live
1. Damascus, Syria
2. Tehran, Iran
3. Tripoli, Libya
4. Karachi, Pakistan
5. Tashkent, Uzbekistan
6. Tunis, Tunisia
7. Lusaka, Zambia
8. Ahmedabad, India
9. Lagos, Nigeria
10. Chennai, India
Summary
The global cost of living crisis persists, with a 7.4% increase this year, driven by soaring grocery prices. Supply chain improvements have slowed hikes, but grocery costs climb. Singapore and Zurich top the list of the most expensive cities. New York dropped to third place. Moscow and St. Petersburg saw significant declines, and Damascus remains the world’s cheapest city. The survey covered 173 cities and excluded Caracas, Venezuela.
