THE FUTURE OF LUXURYدی ۲۴, ۱۳۹۷
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Worldwide Cost of Living 2018
Which global cities have the highest cost
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WORLDWIDE COST OF LIVING 2018
WHICH GLOBAL CITIES HAVE THE HIGHEST COST OF LIVING?
۱ © The Economist Intelligence Unit Limited 2018
The findings of the latest Worldwide Cost of
A European resurgence
In 2018 Singapore retains its title as the world’s most expensive city for the fifth consecutive year in
a top ten that is largely split between Asia and Europe. Seoul is the only other city in the top ten that
has maintained its ranking from the previous year. In the rest of Asia, Hong Kong and Sydney join
Singapore and Seoul in the top ten. Low inflation has pushed Tokyo and Osaka out of the top ten in the
cost of living ranking covering 133 cities worldwide. The Japanese capital, which was the world’s most
expensive city until 2013, has moved seven places down the ranking in the past 12 months. Conversely,
Seoul, which was ranked 21st five years ago, is now in sixth position.
Tel Aviv, which was ranked 34th just five years ago, is now the ninth most expensive city in the
survey. Currency appreciation played a part in this rise, but Tel Aviv also has some specific costs that
drive up prices, notably those of buying, insuring and maintaining a car, which push transport costs
۷۹% above New York prices. Tel Aviv is also the second most expensive city in the survey in which to
Within western Europe it is non-euro area cities that largely remain the most expensive. Zurich
(۲nd), Oslo (5th), Geneva (6th) and Copenhagen (8th) are among the ten priciest. The lone exception
is Paris (2nd), which has featured among the top ten most expensive cities since 2003. With west
European cities returning to the fold, the region now accounts for three of the five most expensive
cities and for one-half of the top ten. Asia accounts for a further four cities, while Tel Aviv is the sole
Middle Eastern representative.
New York has moved four places down the ranking to 13th position owing to a weakening of the US
dollar in 2017, which has also affected the position of other US cities. This, however, still represents a
comparatively sharp increase in the relative cost of living compared with five years ago, when New York
was ranked 27th.
Last year deflation and devaluations were prominent factors in determining the cost of living, with
many cities moving down the ranking owing to currency weakness or falling local prices. Both prices
and a number of currencies rallied during 2017, and although inflation in many cities has remained
moderate, the impact is reflected in the average cost of living. Taking an average of the indices for all
cities surveyed using New York as base city, the global cost of living has risen to 74%, up slightly from
۷۳% last year. This remains significantly lower than five years ago, when the average cost of living index
across the cities surveyed was 85.5%.
Despite topping the ranking, Singapore still offers relative value in some categories, especially
compared with its regional peers. For categories such as personal care, household goods and domestic
help Singapore remains significantly cheaper than its peers, but it remains the most expensive place
in the world to buy and run a car and the third-priciest destination in which to buy clothes. In terms of
food and drink, the cost of living in Singapore is on a par with that of Shanghai in China. Seoul, Tokyo and
Hong Kong are the three most expensive places in the world to buy staple goods. In Seoul, topping
up a grocery basket is almost 50% more expensive than in New York.
The ten most expensive cities in the world
US cities fall back
With the dollar weakening against other currencies, no North American city ranks among the ten
most expensive cities, although New York and Los Angeles remain highly ranked in 13th and 14th
place respectively, compared with ninth and 11th position last year. Despite a rise in recent years in the
relative cost of living in US cities, the latest survey reflects a fall in ranking for all but one (Boston) of the
۱۶ cities surveyed. 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.
Despite a rallying euro in 2017, Paris is the only euro area city in the top ten. The French capital, which
has risen from seventh position to second, remains structurally extremely expensive to live in, with only
alcohol, transport and tobacco offering value for money compared with other European cities. The
Danish capital, Copenhagen, which pegs its currency to the euro, also features in the ten priciest cities,
largely owing to relatively high transport, recreation and personal care costs.
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.
A year of currency fluctuations
Currency fluctuations continue to be a major cause for changes in the ranking. In the past year a
number of markets have seen significant currency movements, which have in many cases countered
the impact of domestic price changes.
Tashkent in Uzbekistan, which experienced the sharpest decline in the cost of living ranking in the
past 12 months, fell by 35 places to 112th position. The reason for this drastic decline was an almost 50%
depreciation in the value of the national currency, the som, after it was allowed to float freely in early
September 2017. The impact of currency devaluation was also felt in Cairo, which has narrowly avoided
joining the bottom ten at 121st place. The city fell by 22 places in the ranking as the Egyptian pound lost
half its value after the Central Bank allowed it to float in November 2016.
In contrast, volatility in the Mexican peso, reflecting in part the renegotiations of the North American
Free-Trade Agreement (NAFTA) as well as increasing inflation in the country, drove Mexico City 23
places up the ranks. In Chile, Santiago has moved up the ranking as increases in the price of copper, the
country’s primary export, strengthened the Chilean peso. A stronger Russian rouble—partly driven by
recovering global oil prices—also pushed Moscow and St Petersburg up the ranking by 12 and 14 places,
respectively. Currency stabilisation, relatively weak consumer demand and a bumper harvest led to a
sharp deceleration of inflation in Russia, but lower prices growth did not offset the increase in relative
costs measured in US dollar terms.
Changes at the bottom
The cheapest cities in the world have seen some changes over the past 12 months. 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 best value for money has traditionally been offered by South Asian cities, particularly those in India
and Pakistan. To an extent this remains true, and Bangalore, Chennai, Karachi and New Delhi feature
among the ten cheapest locations surveyed. India is tipped for rapid economic expansion, but in perhead terms wage and spending growth will remain low. Income inequality means that low wages are
the norm, limiting household spending and creating 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.
Nonetheless, although South Asian cities traditionally occupy positions among the ten cheapest,
they are no longer the cheapest cities in the world. Last year that title 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 it is Syria’s capital, Damascus, which
occupies that position, having fallen by 14 places in the past 12 months. The citizens of Damascus may
not feel that the city is getting cheaper, with inflation averaging an estimated 28% in Syria during 2017.
However, local price rises have not completely offset a near-consistent decline in the value of the
Syrian pound since the onset of war in 2011.
Joining Damascus at the bottom is Venezuela’s capital, Caracas, which fell by 13 places to 132nd place
amid currency devaluation. The Venezuelan government unified and devalued the official exchange
rates in early 2018 in an attempt to reduce currency pressure, but amid hyperinflation, the currency
remains hugely overvalued, as reflected in an extremely large black-market premium.
Cheap but not always cheerful
As Damascus and Caracas show, a growing number of locations are becoming cheaper because of
the impact of political or economic disruption. Although the Indian subcontinent remains structurally
cheap, instability is becoming an increasingly prominent factor in lowering the relative cost of living
of a location. This means that there is a considerable element of risk in some of the world’s cheapest
cities. Karachi, Algiers, Almaty and Lagos have faced well-documented economic, political, security and
infrastructural challenges, and there is some correlation between The Economist Intelligence Unit’s
cost of living ranking and its sister ranking, the liveability survey. Put simply, cheaper cities also tend to
be less liveable.
A bumpy ride ahead
The cost of living is always changing, and there are already indications of further changes that are set to
take place during the coming year. After an encouraging 2017, when the rate of economic growth was at
its fastest since 2011, The Economist Intelligence Unit expects 2018 to proceed along similar lines, with
the US economy and the euro area motoring along, the Chinese government managing its economic
slowdown carefully, and Japan growing again by more than 1%. Higher commodity prices will boost
emerging-market exporters, as will strong external demand from developed markets.
After five consecutive years of decline, oil prices bottomed out in 2016 and rebounded in 2017 along
with other commodity prices. At the very basic level, this will have an impact on prices, especially in
markets where basic goods make up the bulk of the shopping basket. But there are further implications.
Even rising oil prices will still be well below levels enjoyed just a few years ago, which will continue to
weigh on economies that rely heavily on oil revenue. This could mean austerity, economic controls and
weak inflation persisting in affected countries, depressing consumer sentiment and growth.
Equally, 2018 could see fallout from a number of political and economic shocks taking deeper effect.
The UK has already seen sharp declines in the relative cost of living owing to the Brexit referendum
and related currency weaknesses. In 2018 these are expected to translate into further price rises as
supply chains become more complicated and import costs rise. These inflationary effects could be
compounded if sterling were to stage a recovery.
There are other unknowns as well. The US president, Donald Trump, has caused some significant
upheaval in trade agreements and international relations, which may push up prices for imports
and exports around the world as treaties unravel or come under scrutiny. Meanwhile, measures
adopted in China to address growing levels of private debt are still expected to prompt a slowdown
in consumption and growth over the next two years. This could have consequences for the rest of the
world, resulting in further staged renminbi devaluations that would affect the relative cost of living in
Instability and conflict around the world could continue to fuel localised, shortage-driven inflation,
which would have an impact on the cost of living in certain cities. Latin American cities have seen
significant movements both up and down the ranking in recent years. Equally, exchange-rate volatility
has meant that, while Asian cities have largely risen in cost-of-living terms, many urban centres in
China and Australia have seen contrasting movements from year to year. It is also worth remembering
that local inflation driven by instability is often counteracted by economic weakness and slumping
exchange rates. As a result, cities that see the highest inflation will often see their cost of living fall
compared with that of their global peers.
With emerging economies supplying much of the wage and demand growth, it seems likely that
these locations will become relatively more expensive as economic growth and commodity prices
recover. However, price convergence of this kind is very much a long-term trend, and in the short
and medium term the capacity for economic shocks and currency swings can make a location very
expensive or very cheap very quickly.
Background: about the survey
The Worldwide Cost of Living is a biannual Economist Intelligence Unit survey that compares more
than 400 individual prices across 160 products and services. These include food, drink, clothing,
household supplies and personal care items, home rents, transport, utility bills, private schools,
domestic help and recreational costs.
The survey itself is a purpose-built Internet tool designed to help human resources and finance
managers calculate cost-of-living allowances and build compensation packages for expatriates and
business travellers. The survey incorporates easy-to-understand comparative cost-of-living indices
between cities. The survey allows for city-to-city comparisons, but for the purpose of this report all
cities are compared with a base city of New York, which has an index set at 100. The survey has been
carried out for more than 30 years
More than 50,000 individual prices are collected in each survey, conducted each March and September
and published in June and December. Economist Intelligence Unit researchers survey a range of stores:
supermarkets, mid-priced stores and higher-priced speciality outlets. Prices reflect costs for more than
۱۶۰ items in each city. These are not recommended retail prices or manufacturers’ costs; they are what
the paying customer is charged.
Prices gathered are then converted into a central currency (US dollars) using the prevailing exchange
rate and weighted in order to achieve comparative indices. The cost-of-living index uses an identical
set of weights that is internationally based and not geared towards the spending pattern of any specific
nationality. Items are individually weighted across a range of categories, and a comparative index is
produced using the relative difference by weighted item.
Worldwide Cost of Living – the full report
Purchase the entire ranking and access deeper analysis
The full Worldwide Cost of Living report allows you to compare the cost of living in over 130 cities
around the world. The ranking draws upon a comprehensive underlying data set including over 400
individual price points across 160 goods and services in 90 countries.
l View the entire ranking of over 130 cities around the world based on their relative cost of living.
l 400 individual prices across 160 products and services. This includes food, drink, clothing, household
supplies and personal care items, home rents, transport, utility bills, private schools, domestic help
and recreational costs.
l Relate each city’s rank to that of last year, 5 years ago and 10 years ago.
l Assessment of the current and past trends impacting the cost of living, including key factors such as
currency swings, local inflation and commodity shocks.
l Regional analysis comparing the key trends taking place in the Americas, Africa, Asia, Europe, and the
You can purchase this year’s report by visiting The EIU Store:
Worldwide Cost of Living – the complete data set
The city-to-city data solution for assessing living costs around the world
The full Worldwide Cost of Living data set allows you to compare more than 400 individual prices
across 160 products and services in over 130 cities around the world. This includes food, drink, clothing,
household supplies and personal care items, home rents, transport, utility bills, private schools,
domestic help and recreational costs.
The Worldwide Cost of Living data set provides you with:
l Easy-to-understand comparative cost of living indices between a base and host city as well as
individual category indices for different sub-baskets.
l A comparison of cost of living differences across all cities.
l Detailed access for all data on a particular city including price levels and business costs.
l Data for all individual prices and underlying scores.
l Indices which can be tailored in a variety of user-friendly ways.