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Know, world’s most expensive cities to live in 2022 & the reasons

Niti Post - December 3, 2022
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New York shares the unwanted title of being the most expensive city of the world to live in with Singapore. Tel Aviv of Israel, has emerged after them. Hong Kong and Los Angeles are tied for third place. Then come Zurich ( Switzerland), Geneva (Switzerland), San Francisco (California), Paris (France) and Copenhagen ( Denmark) in succession. However, several big cities of the world have also dropped down the rankings with London being at 28 from 17th in 2021.

Worldwide Cost of Living report

Economist Intelligence Unit’s Worldwide Cost of Living report, has come out with this report, assessing the cost of living in top 172 cities of the globe. As per the study, a number of factors have driven the cost up, including the continuing conflict between Russia and Ukraine for around 10 months, snapping the supply chain. The study suggests the supply chain snarls have also been caused by other factors like Covid 19, giving a surge to the costs.

Asian cities majorly escaped the steep rise

It is interesting to note that Asian cities have escaped the steep rise in prices seen elsewhere in the world. While, the average price rises in Asian cities remained at around 4.5%, prices rocketed an average 8.1% in world’s major cities over the last year. The price rises in a country or a city, are also affected by the government policies and currency moves, means appreciation or depreciation in currencies.

Damascus and Tripoli- world’s cheapest cities

Last year, Tel Aviv had topped the list, but this year it has come down to the third position. The Syrian capital Damascus and Libya’s capital Tripoli are the world’s cheapest cities for the obvious reasons as they have long been facing civil war like conditions and people in large number have gone away from these cities. Russian cities are also experiencing the heat of the global price rise, placing Moscow and St Petersburg among costly cities to live in.

Reasons of the rise in costs

The global rises in prices are caused by a number of factors. Besides, lingering Russia-Ukraine conflict and Covid 19 lockdown, western sanctions on Russia have also caused supply chain problems. In addition, China’s zero-Covid policies and stringent restrictions have also restricted the supply of required things to the rest of the world who depends on China. Rising interest rates and exchange rate shifts have also resulted in the rise of cost of living across the globe. The research says, the average price rise across the globe, is the steepest that people have experienced in last 20 years for which they have the required digital data.

Energy crisis had deepened it

Moreover, food crisis and energy crisis also appear to have made things tougher for the people, especially in cities. Rising energy prices are said to be the biggest propellant to higher inflation. Along with Petrol and Diesel, Gas and electricity prices have also gone up by 29% in several countries, especially in western European cities. Commodity prices have also soared in recent months like never before in last few decades. The kind of inflation confronted by majority of the countries across the globe, was not an usual incident earlier.

Prices may soften in 2023

However, softer demand for recreational goods and services, has subdued increases in their prices, as people prefer spending on essential things amid crisis. If people, having an eye over the development, are to be believed, commodity prices may also fall in 2023 compared with 2022 levels.

China’s zero-Covid policy poses challenges

However, the organization has said that the cost increases will ease next year in 2023, as higher prices and rising interest rates may remove some of the demand pressure. Moreover, supply chain crisis may also start to ease next year. However, China’s zero-Covid policy may continue posing the challenges.

The list of costly cities to live in, has been prepared by assessing more than 200 products and services in 172 major cities including a range of businesses both high and low end to have a sense of prices have fluctuated over the last year in these segments.

 

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