Tel Aviv has supplanted Paris and Singapore as the most expensive city in the world, according to an annual study by The Economist which points out that supply chain problems have driven up prices in many cities.
“In 5th position last year, Tel Aviv becomes the most expensive city in the world” for the first time, according to a statement accompanying the publication of the study on Wednesday.
This position reflects “the strength of the Israeli currency, the shekel, against the dollar, because the index takes prices in New York as a basis for comparison,” the study said.
“After sharing first place with Zurich and Hong Kong in 2020, Paris is falling to second position, which it occupies with Singapore in this new edition,” notes the study.
This underlines that the measured price increase is the fastest recorded for five years, at 3.5%.
Damascus remains the cheapest city in the world due to a currency which crumbles against the dollar and consequently prices in greenbacks which plunge, the civil war continuing to decimate the local economy.
The Syrian capital is suffering from very high inflation as are Caracas, Buenos Aires and Tehran, the latter having recorded the strongest advance in the ranking, from 79th to 29th place, the US sanctions leading to shortages and price increases.
“In general, the top of the ranking remains dominated by European cities and developed Asian cities while North American and Chinese cities keep relatively moderate prices,” said the study.
The cheapest cities – in dollars – are found mostly in the Middle East, Africa or poorer parts of Asia.
Transportation costs have soared in the wake of gasoline prices, the study notes, but tobacco and entertainment have also seen sharp price increases.
“Over the coming year, we expect the cost of living to rise even more in many cities as wages rise in several sectors,” notes Upasana Dutt, director of the study.
“However, we expect central banks to raise key rates cautiously to curb inflation. Price increases should therefore start to ease, ”she adds.
The “Global Cost of Living Index” published by The Economist Intelligence Unit (EIU) ranks 173 cities based on price based on a basket of more than 200 products and services.