Usual suspects New York and Singapore are tied for first place, a ranking driven by high incomes and a strong US dollar. Tel Aviv, which topped the list last year, fell to third place, followed by Los Angeles and Hong Kong in fourth place.
The 2022 edition compares the cost of living in 172 cities by analyzing the prices of more than 200 goods and services, including rent, utility bills, household goods and groceries. The survey documented an 8.1 percent rise in global inflation over the past year: the highest on record since the EIU began tracking nearly two decades ago.
5 issues behind the global cost of living crisis
Economists have blamed the global cost-of-living crisis in part on the war in Ukraine, along with ongoing COVID-19 restrictions in China, other effects of the pandemic, supply chain issues, climate change and the compounding impact of inflation itself.
Upasana Dutt, who led the cost of living survey this year and last year, said the war in Ukraine was one of two key factors, along with the pandemic.
“What we’re seeing is a disruption in the supply chain, and that’s only happened because of the war,” she said. “If there was no war, then this kind of cataclysm would obviously not have been seen. It would be much more limited.”
As pandemic restrictions eased, rising demand for goods faced prolonged supply chain bottlenecks, Dutt said, leading to high inflation rates. Western sanctions imposed on Russia “complicated the impact on the supply of goods everywhere.”
The report documents this impact in other European cities, where attempts to reduce dependence on Russian energy have led to a 29% increase in gas and electricity prices in some regions, compared to a global average increase of 11%.
Globally, utility bills rose an average of 11 percent and car prices rose an average of 9.5 percent in local currency, according to the EIU. The largest price increase noted in the report was for a liter of oil, which rose by an average of 22 percent.
The European cities of Luxembourg, Stockholm, Brussels, Lyon, France; and Manchester, England; makes up five of the 10 cities that have fallen the most in the rankings this year – a result of weakened economies from the energy crisis.
In the United States, 22 cities moved up the rankings after rapid price increases. Cities including Atlanta, Charlotte, Indianapolis, San Diego and Boston saw large increases in the cost of living in the rankings — among the top 10 largest such increases recorded globally.
While Istanbul, Buenos Aires and Tehran experienced high inflation increases, the highest inflation rate was recorded in Caracas, Venezuela, where the cost of living rose by 132 percent in the past year.
The report predicts some relief in 2023 if commodity prices “fall sharply” as long as the war in Ukraine does not escalate.