New York is the world's most expensive metropolis in 2022, according to the Economist Intelligence Unit's annual survey. It shared that unwelcome title with Singapore as rising energy prices doubled the inflation rate in the world's major cities, reports The Guardian.
Last year's leader Tel Aviv fell to third place, while Sydney made its way into the TOP-10. And Moscow and St. Petersburg in Russia climbed a whopping 88 places in the rankings as sanctions and high oil prices pushed up prices, according to the EIU report on the cost of living worldwide.
The Venezuelan capital of Caracas, with a 132% price increase in 2022, is well below its 2019 hyperinflation rate, which was over 25% but remained too high to be included in the study. Average inflation of 000% in terms of local currency was still the highest in more than two decades of polls (compared to 8,1% last year and 3,5% in 1,9).
A stronger currency was one of the factors that lifted cities up in the rankings.
Six of the eight highest-paid US cities were led by Atlanta, which rose from 42nd to 46th place out of 172 metropolitan areas surveyed. The American dollar strengthened against almost all currencies. The US Federal Reserve raised interest rates and signaled further increases.
Cities in countries where their currencies have plummeted were among those that sank down the most expensive list. Japan's Tokyo and Osaka are among the top 10 cities at 37th and 43rd respectively, up from 13th and 10th in 2021.
Stockholm and Luxembourg fell the most, both losing 38 places to 99th and 104th. Damascus in Syria and Tripoli in Libya have maintained their positions as the cheapest cities.
The city-state was the 2021nd most expensive city in 1 and has been ranked 10st for eight of the last XNUMX years.
All three UK cities surveyed dropped in the rankings. And London is now ranked 28th after 17th in 2021. Edinburgh was not on the 27th position, as before, but on the 46th, while Manchester was on the 73rd place, although last year it was on the 41st
A global surge in inflation was gaining momentum before Russia's invasion of Ukraine in February disrupted the supply of key commodities, especially food
Subsequent sanctions against Russia led to a further increase in the prices of oil, gas and other energy products.
Rising gasoline prices have been the biggest driver of inflation. On average, a liter of fuel in terms of local currency cost 22% more than a year earlier.
Gas and electricity prices in Western European cities have risen by 29%, or nearly triple the average growth of 11% worldwide. The region has struggled to find alternatives to Russian energy sources.
The consolation for some of these increases has been "moderate" increases in the prices of leisure goods and services. “This may reflect reduced demand as consumers focus spending on essentials,” the EIU said in a statement.
Barring some unforeseen disasters, the EIU predicts that price increases will ease in 2023 as higher interest rates partially ease demand pressure and supply chain lockdowns begin to ease. China may remain a wildcard as its COVID-19 policy begins to falter.
The good news is that prices seem to be starting to come down in some countries as interest rates rise.
“If the war in Ukraine does not escalate, we predict that prices for energy, food and materials such as metals are likely to fall sharply in 2023 from 2022 levels. Although they may well remain higher than previous indicators,” the report says. Global commodity prices rose by 9,4% in 2022, while they are forecast to increase by 2023% in 6,5.