In news that won’t come as a surprise to anyone who’s been feeling the pinch, the global cost of living crisis is far from over. And big-city dwellers can really take a hit.
According to the annual Worldwide Cost of Living Index that’s published by the Economist Intelligence Unit (EIU), the average cost of living rose by 7.4% this year. Grocery prices increased the fastest.
Although this is slightly lower than the 8.1% jump the same survey recorded in 2022, the numbers remain significantly higher than “historic trends.”
But there is some good news. Utility prices, the fastest rising category in the 2022 survey, showed the least amount of inflation this time around.
Inflation predictions
Price increases are slowing in pace because of the waning of supply chain issues since China lifted its Covid-19 restrictions in late 2022.
However, grocery prices are continuing to rise as retailers pass on higher costs to consumers.
“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,” Upasana Dutt, Head of Worldwide Cost of Living at EIU, said in a statement.
Dutt went on to warn the upside risks of armed conflict and extreme weather remain.
“Further escalations of the Israel-Hamas war would drive up energy prices, while a greater than expected impact from El Niño would push up food prices even further,” she added.
Inevitably, increasing living costs have meant that many cities have become more expensive to live in – but some get hit harder than others.
The most expensive cities
The city-state of Singapore and Switzerland’s Zurich were named as the most expensive cities in the world.
The rise of the latter, which jumped from sixth place on last year’s list, was attributed to the strength of the Swiss Franc along with the high prices of groceries, household goods and recreation. Singapore’s costly transport and clothing were also noted.
Although New York tied with Singapore for first place last year, the popular US destination, where prices have increased by 1.9% according to the study, slipped to third, tying with Switzerland’s Geneva.
Hong Kong, the only other Asian destination in the top 10, was fifth, while Los Angeles was at No. 6, and Paris was named the seventh most expensive city in the world.
Israel’s Tel Aviv shares eighth place with Denmark’s Copenhagen. However, it’s worth noting that survey was conducted before the October outbreak of Israel-Hamas conflict.
Finally, San Francisco, one of three US cities in the top 10, came in 10th place.
Movers and shakers
Further down the list, Russian cities Moscow and St. Petersburg saw some of the sharpest drops, falling 105 places to 142 and 74 places to 147 respectively in this year’s ranking. The value of the ruble has dropped considerably since Russia’s invasion of Ukraine in February 2022.
The survey said the slow post-pandemic recovery and “subdued consumer demand” were among the factors that led to Chinese cities such as Beijing, which ranked at 34 last year, dropping several places down the list.
Damascus, Syria, remains the world’s cheapest city. Tehran, Iran, and Tripoli, Libya, are also near the bottom, ranking in 172nd and 171st place respectively.
Utility, domestic help and tobacco costs were highest in US cities, while Western European cities were some of the most expensive when it came to recreation, transport and household goods.
Groceries and alcohol were most costly in Asian cities, according to the survey.
The 2023 Worldwide Cost of Living surveyed 173 major cities, comparing more than 400 individual prices across 200 products and services. It excluded Venezuela’s Caracas, where prices have risen by 450% since 2022.
The world’s 10 most expensive cities for 2023
1. Zurich and Singapore (tie)
3. New York and Geneva (tie)
5. Hong Kong
6. Los Angeles
7. Paris
8. Tel Aviv and Copenhagen (tie)
10. San Francisco
