Usual suspects New York and Singapore shared the top spot, a ranking driven by high incomes and a strong US dollar. Tel Aviv, which topped the list last year, fell to third place, with Los Angeles and Hong Kong tied for fourth.
The 2022 edition compares the cost of living in 172 cities, analyzing the prices of more than 200 goods and services, including rent, utility bills, household goods and groceries. The survey documented an 8.1 percent rise in inflation globally over the past year: the highest recorded since the EIU began tracking nearly two decades ago.
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Economists have partly attributed the global cost of living crisis to the war in Ukraine, along with ongoing covid-19 restrictions in China, other effects of the pandemic, supply chain issues, climate change and the compounding impact of inflation itself.
Upasana Dutt, who led the cost of living survey this year and last year, said the war in Ukraine is one of two key factors, alongside the pandemic.
“What we’re noticing is a disruption in the supply chain, and that’s only happened because of the war,” she said. “If there was no war, obviously this kind of upheaval would not be seen. It would be far more limited.”
As pandemic restrictions eased, rising demand for goods faced continued supply chain blockages, Dutt said, leading to high inflation levels. Western sanctions imposed on Russia “amplified the impact on the supply of goods everywhere”.
The report documents this impact in other European cities, where efforts to reduce dependence on Russian energy led to a 29 percent increase in gas and electricity prices in some regions, compared to a global average increase of 11 percent.
Worldwide, electricity bills are up by an average of 11 per cent, and car prices have risen by an average of 9.5 per cent in local currency, according to the EIU. The strongest price increase noted in the report is for a liter of oil, which has risen by 22 per cent on average.
The European cities of Luxembourg, Stockholm, Brussels, Lyon, France; and Manchester, England; made up five of the 10 cities that fell the most in the rankings this year – a result of economies weakened by the energy crisis.
In the US, 22 cities moved up in the ranking after rapid price increases. Cities including Atlanta, Charlotte, Indianapolis, San Diego and Boston all saw significant increases in cost of living rankings — among the 10 largest such increases recorded globally.
While Istanbul, Buenos Aires and Tehran have experienced high increases in inflation, the highest inflation rate was recorded in Caracas, Venezuela, where the cost of living has risen by 132 percent in the past year.
The report expects some relief in 2023, if commodity prices “fall sharply”, as long as the war in Ukraine does not escalate.