In a surprising shift, Singapore and Zurich have claimed the title of the world's most expensive cities to live in 2023, surpassing New York, according to the Economist Intelligence Unit's Worldwide Cost of Living report. The survey reveals that factors such as the exorbitant cost of car ownership, expensive alcohol, and rising grocery prices have propelled Singapore to the top spot, which it shared with New York in the previous year. On the other hand, Zurich has climbed from sixth place in the rankings, owing to the strength of the Swiss franc and the high prices of groceries, household goods, and recreation.
Joining Singapore and Zurich in the top ranks are Geneva and Hong Kong, which secured third and fifth places respectively, tied with New York. The study found that prices around the world have increased by an average of 7.4% in local currency terms, a slight decrease from last year's 8.1% rise. Chinese cities experienced a noticeable decline in the rankings due to the country's sluggish post-pandemic recovery and subdued consumer demand.
Among the top 10 costliest cities, only two are located in the United States: Los Angeles in sixth place and San Francisco in the tenth position. At the other end of the spectrum, despite its cost-of-living basket price skyrocketing 321%, Damascus in Syria retains its position as the cheapest city. Mexican cities Santiago de Querétaro and Aguascalientes experienced significant upward movement in the rankings due to the strengthening of the peso against the US dollar. Tokyo and Osaka, however, faced a decline in their rankings with the weaker Japanese yen.
Interestingly, the survey was conducted before the Israel-Hamas war, so Tel Aviv's inclusion in the top 10 may not reflect the impact of the conflict on prices. Utility prices showed the slowest rate of increase among the ten categories of goods and services analyzed, rising by only 5.7%.
Upasana Dutt, head of worldwide cost of living at EIU, highlighted that the supply-side shocks that initially led to price hikes have subsided as China lifted its Covid-19 restrictions and the energy prices spike driven by Russia's invasion of Ukraine in early 2022 has eased. Dutt predicts that inflation will continue to decelerate in 2024, alleviating prices globally.
The survey, conducted between August 14 and September 11, compared more than 400 individual prices across 173 cities worldwide. Singapore and Zurich's rise to the top serves as a reminder of the constantly evolving economic landscape and highlights the impact of various factors on the cost of living in different global cities.