Singapore ties with New York as world’s most expensive city
Data released today by EIU reveals the soaring cost of living in the world’s major cities as war in Ukraine and continuing pandemic restrictions disrupt supply chains, particularly for energy and food. On average, prices across the 172 cities covered by the EIU’s Worldwide Cost of Living survey (WCOL) index rose by 8.1% in local-currency terms, the highest rate in the 20 years for which we have collected digital WCOL data. This year’s survey was conducted between August 16th and September 16th 2022.
Singapore regained the top of the rankings for the eighth time within the past ten years, tying with first-timer New York. While New York was buoyed this year by a strong dollar (the WCOL index is calculated against prices in New York), Singapore has faced a consistently high cost of living. The city state has the world’s highest transport prices, owing to strict government controls on car numbers. It is also among the most expensive cities for clothing, alcohol and tobacco, thanks to its success as a premier location for business investment. Together, the two cities bumped last year’s leader, Tel Aviv, down into third place. Damascus (Syria) and Tripoli (Libya) remain the cheapest cities.
On average the 58 Asian cities in the WCOL survey saw only moderate price increases of 4.5% in local-currency terms. The exception was Karachi in Pakistan, where prices rose by 22% year on year partly as a result of the devastating floods in the country. How Asian cities fared in the rankings varied widely, however, depending on government policies and currency shifts.
The Japanese cities of Tokyo and Osaka were among the biggest fallers, dropping by 24 and 33 places respectively as interest rates stayed low and the yen depreciated. Most cities in other developed Asian countries, including Taiwan, South Korea and New Zealand, also fell down the rankings, but Australian cities rose as strong commodity exports buoyed the local currency. In fact, Sydney jumped four positions in this year’s survey, making the top 10 most expensive cities.
Developing Asian countries also saw varied movements. In China, the six most expensive cities rose up the rankings, led by Shanghai, which is now in the top 20. However, the other 13 Chinese cities, including Guangzhou, Tianjin and Wuhan, fell by an average of six places. Sri Lanka’s capital, Colombo, also fell down the rankings as its currency and pricing were hit by its debt default. Karachi remains the cheapest Asian city, followed by Ahmedabad, Chennai and Bangalore in India.
Globally, the most rapid price rises were for petrol (as in 2021), which soared by 22% in local-currency terms. Prices for utilities such as electricity, as well as food and basic household goods, also rose rapidly. By contrast, prices for recreational goods and services were subdued; this may reflect softer demand as consumers focus spending on essentials. These calculations exclude Caracas, which continues to suffer from hyperinflation. Several other cities are also suffering from very high inflation, including Istanbul, Buenos Aires and Tehran.
Upasana Dutt, Head of Worldwide Cost of Living at EIU, 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.
We can see the impact in this year’s index, with the average price rise across the 172 cities in our survey being the strongest we’ve seen in the 20 years for which we have digital data. However, Asia has been partly spared from this cost-of-living crisis, with some countries benefiting from cheaper Russian oil and continued low interest rates. We expect prices to start easing over the coming year as supply bottle-necks start to ease and slowing economies weigh on consumer demand.”
A free version of the report can be downloaded at eiu.com/wcol