- Disruptions in supply chains and shifting customer demand have raised the cost of living in several of our greatest cities.
- Damascus and Tehran and Caracas, Venezuela, and Buenos Aires, Argentina saw extremely severe inflation in 2021.
It’s been a terrible year for wallets all over the world.
According to a new study published Wednesday, supply-chain disruptions and shifting customer demand have pushed up the cost of living in many of our largest cities, and inflation is the quickest recorded in the last five years.
One city has changed faster than most, rising from fifth to the first position in the Economist Intelligence Unit’s Worldwide Cost of Living review this year (EIU).
Tel Aviv topped the rankings for the first time, surpassing previous year’s leader Paris, which is now tied for second place with Singapore.
According to the EIU, Tel Aviv’s strong surge on the index is due to rises in grocery and transportation prices and the strength of the Israeli shekel against the US dollar.
COMMON GOODS AND SERVICES
The 2021 Worldwide Cost of Living index examines more than 200 everyday products and services prices across 173 global cities – 40 more than the previous year.
Each March and September, EIU’s global team of researchers collects data for the survey, conducted for more than three decades.
Because the index is based on New York City prices, cities with stronger currencies versus the US dollar are more likely to show higher rankings.
After sharing the top spot with Paris last year, Zurich and Hong Kong are ranked fourth and fifth, respectively. The remaining top ten cities include New York, Geneva, Copenhagen, Los Angeles, and Osaka.
European and developed Asian cities still dominate the top rankings. The cities with the lowest rankings are mostly in the Middle East, Africa, and less prosperous portions of Asia.
According to the EIU, prices for the index’s covered products and services have grown by 3.5% year on year in local currency, compared to a 1.9 percent rise this time last year.
These widely publicized global supply-chain issues have contributed to price increases, and the COVID-19 epidemic and social constraints continue to impact production and trade around the world.
With a new coronavirus strain creating broad concern, these problems aren’t going away anytime soon.
According to the EIU, rising oil costs led to a 21% increase in the price of unleaded gasoline. Still, there were also significant price increases in the recreation, cigarette, and personal care categories.
The fastest-rising city in 2021 was Tehran, Iran, which rose 50 places from No.79 to No.29 due to US sanctions, which caused shortages and higher prices.
As its war-torn economy struggles, Damascus, Syria’s capital, is once again ranked as the world’s cheapest city. Damascus and Tehran and Caracas, Venezuela, and Buenos Aires, Argentina saw extremely severe inflation in 2021.
EVEN MORE TO COME
“Although most economies throughout the world are now recovering as Covid-19 vaccinations are put out,” Upasana Dutt, EIU’s head of Worldwide Cost of Living, said in a statement.
“Many big cities are still seeing surges in cases, leading to social constraints.” These have made disruptions in the supply of commodities, resulting in shortages and higher costs.
The impact is obvious in this year’s index, with the hike in gasoline costs particularly noticeable. However, not all cities experienced price rises.
Many of the cities at the bottom of our rankings saw their prices stagnate or even fall, owing in part to currency depreciation versus the US dollar.
We anticipate that living costs in many cities will climb higher in the coming year as earnings rise across the board. However, we expect central banks to hike interest rates slowly to contain inflation. As a result, price rises should begin to reduce from this year’s levels.”
WORLD’S MOST EXPENSIVE CITIES TO LIVE 2021
1. Tel Aviv, Israel
2. Paris, France
4. Zurich, Switzerland
5. Hong Kong
6. New York City, New York
7. Geneva, Switzerland
8. Copenhagen, Denmark
9. Los Angeles, California
10. Osaka, Japan
11. Oslo, Norway
12. Seoul, South Korea
13. Tokyo, Japan
14. Vienna, Austria
14. Sydney, Australia
16. Melbourne, Australia
17. Helsinki, Finland
17. London, UK
19. Dublin, Ireland
19. Frankfurt, Germany
19. Shanghai, China