The Economist Intelligence Unit’s latest Worldwide Cost of Living report 2018 has ranked Singapore as the world’s most expensive city for the fifth straight year, while Syrian capital Damascus was ranked as the world’s cheapest city.
The other cities that were ranked as the most expensive include Paris and Zurich, which were tied at the second position, followed by Hong Kong and Norway’s capital Oslo. The top ten in the list is largely split between Asia and Europe. South Korea’s capital Seoul is the only city other than Singapore in the top ten that has managed to retain its ranking from the previous year.
Israel’s Tel Aviv, which was ranked 34th just five years ago, is now the ninth most expensive city in the survey.
US cities fall back
• No North American city was ranked among the ten most expensive cities. The two top-ranked US cities New York and Los Angeles fell back this year to the 13th and 14th position respectively from their ninth and 11th position last year.
• Except for one US city- Boston, all other 16 cities surveyed reflect a fall in ranking in the latest survey.
• The result has been majorly attributed to the weakening of the dollar against other currencies.
• Domestic help and utilities, however, remain expensive in North America, with US cities accounting for nine and five of the top ten cities, respectively, for these categories.
Asia: Home to world’s most expensive and cheapest cities!
• When looking at the most expensive cities by category, it is interesting to note that Asian cities tend to be the priciest locations for general grocery shopping. However, European cities tend to be priciest in the household, personal care, recreation and entertainment categories, with Zurich and Geneva the most expensive, perhaps reflecting a greater premium on discretionary spending.
• According to the survey, Asia is home to some of the world’s most expensive cities, but to many of the world’s cheapest cities too.
• Within Asia, the survey noted that the best value for money was offered by South Asian cities, particularly those in India and Pakistan.
• The Indian cities of Bangalore, Chennai and New Delhi and Pakistan’s Karachi featured among the ten cheapest locations surveyed.
Why are Indian cities among the cheapest?
Though India is rapidly expanding its economy, in per head terms wage and spending growth remain to be low.
The inequality in income also points to the fact that low wages are the norm. It also leads to limiting of household spending and the creation of many tiers of pricing as well as strong competition from a range of retail sources.
This, combined with a cheap and plentiful supply of goods into cities from rural producers with short supply chains as well as government subsidies on some products, has kept prices down, especially by Western standards.
Though South Asian cities traditionally occupy positions among the ten cheapest, they are no longer the cheapest cities in the world.
Last year the cheapest city tag was held by Kazakhstan’s business centre, Almaty, which fell in the ranking following a 50% devaluation of the national currency, the tenge, after it was allowed to float in August 2015.
This year, Syria’s capital, Damascus, occupies the position, having fallen by 14 places in the past 12 months.
Joining Damascus at the bottom is Venezuela’s capital, Caracas, which fell by 13 places to 132nd place amid currency devaluation.