This year, a report from the Economist Intelligence Unit said that New York and Singapore had the highest cost of living, replacing Tel Aviv at the top of the list.
Costs rose at the fastest rate in at least 20 years, by an average of 8.1% in cities worldwide. The war in Ukraine caused this, as restrictions on Covid in China and rising energy prices. The EIU survey, done earlier this year, looked at the prices of more than 200 goods and services in 172 cities worldwide. Supply-chain problems were cited as a reason for the increase.
INFLATION HITS THE GLOBAL ECONOMY
In many countries, inflation reached levels that haven’t been seen in decades. This caused a global economic slowdown that is expected to keep going.
Geopoll did a study earlier this year and found that 75% of the thousands of people asked around the world said that the rising cost of living has made them have to cut their standard of living by a lot.
The war explains why prices increased the most in Moscow and St. Petersburg. It also caused oil prices to go up around the world, which made gas prices go up 22% on average from a year earlier in local currency.
New York and Singapore Replace Tel Aviv as Most Expensive Cities
As Western Europe tried to stop getting its energy from Russia, prices for gas and electricity rose by an average of 29% in cities there, compared to an 11% rise worldwide.
The strength of the U.S. dollar made prices go up in U.S. cities, which is why New York is at the top of the list for the first time. During the pandemic, rents in New York stopped increasing for a while, but now they’re back up to new highs. San Francisco and Los Angeles were also in the top 10 cities with the highest living costs, and six of the 10 cities with the biggest price increases were in the U.S.
Damascus, Tripoli, and Tehran had the lowest prices because their economies and currencies were in bad shape. Stockholm and Luxembourg fell the most from 2021 to 2022. This was partly because of the Ukraine war and the European energy crisis.
The rate of inflation is still worryingly high. A study done earlier this month showed that 70% of people think prices will keep going up worldwide, and 61% think the number of people without jobs will also increase. The EIU said that global consumer price growth will slow to 6.5% in 2023. This is still higher than usual, but it is a big drop from 2022.
As the world economy starts to slow down, so will interest rates. Prices for energy, food, and supplies will likely decrease in 2023 unless the war in Ukraine worsens.
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