Ahmedabad, Chennai, Bengaluru among cheapest cities to live in globally

New York and Singapore are the most expensive cities to live in, according to the Economist Intelligence Unit’s Worldwide Cost of Living survey of 172 cities across the world. The survey cited the war in Ukraine and supply-chain issues as the reason for the rise in costs.

Damascus, Tripoli and Tehran were the cheapest cities, reflecting weak economies and currencies. The inflation in these cities too were moderate. From India, Ahmedabad, Chennai and Bengaluru joined the cheapest cities list, ranked at 8, 9 and 11, respectively, among the 172 surveyed across the world.

The survey was conducted between August 16 and September 16  2022.

Cities across the world faced the cost-of-living crisis, with an average 8% rise in overall prices. The most rapid price increases were for a litre of petrol, which has risen by 22% year-on-year on average in local-currency terms.

Also read: Mumbai costliest Indian city, Kolkata cheapest: Mercer 2022 survey

However, local prices in certain parts of the world were still worse. Istanbul and Colombo saw a rise of 148% and 189% rise in petrol prices. Prices for gas and electricity were up by 29% on average in local-currency terms in western European cities against a global average increase of 11%.

Prices for utilities such as electricity, as well as food and basic household goods, also rose rapidly as did that of cars by an average of 9.5%. By contrast, prices for recreational goods and services were subdued; this may reflect softer demand as consumers focus spending on essentials.

Supply-chain issues

“The war in Ukraine, Western sanctions on Russia and China’s zero-covid policies have caused supply-chain problems that, combined with rising interest rates and exchange-rate shifts, have resulted in a cost-of-living crisis across the world,” said Upasana Dutt, head of worldwide cost of living at EIU.

“We can clearly see the impact in this year’s index, with the average price rise across the 172 cities in our survey being the strongest we’ve seen in the 20 years for which we have digital data. We expect prices to start easing over the coming year as supply bottle-necks start to ease and slowing economies weigh on consumer demand,” Dutt added.

At the top of the list

Among the costliest cities, Singapore and New York pipped Israel’s Tel Aviv and brought it down to third from the first spot. Hong Kong and Los Angeles stood joint fourth while Zurich, Geneva, San Francisco, Paris, Copenhagen and Sydney followed in the list.

Singapore has been the costliest city in the world for eight of the last 10 years while this is the first time that New York has taken the top slot. 

Caracas in Venezuela was the worst hit with inflation rising by 132% but the survey did not include the city as it continues to suffer from hyperinflation and in order not to skew the average. However, this is a vast improvement from 2019’s inflation of 25,504%.

The Russian cities of Moscow and St Petersburg were the next worst hit by the inflation crisis brought about by the war in Ukraine and the sanctions by the West on Russia, which resulted in the two cities recording the highest jump in the list by 88 and 70 places, respectively.

Also read: Unseasonal rain, crop losses likely to keep India’s food inflation high

According to the survey of prices, inflation in Moscow is now 17.1% year on year in local-currency terms, while in St Petersburg it has reached 19.4%.

US cities rise up rankings with strong dollar

All 22 US cities in the survey rose up the rankings amid rapid price rises and a strong dollar. Six of these (Atlanta, Charlotte, Indianapolis, San Diego, Portland and Boston) were among the 10 cities showing the biggest jumps up the rankings.

Most other European cities fell down the rankings, as the energy crisis and weakening economies pushed down the value of the euro and other local currencies. Capital controls, import suppression and the conversion of European gas payments into roubles are supporting the value of the local currency. Stockholm, Luxembourg and Lyon were the biggest fallers in the rankings.