The 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, slipped to third place, with Los Angeles and Hong Kong tied for fourth.
The 2022 edition compares the cost of living in 172 cities, 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 recorded since the EIU began tracking nearly two decades ago.
Economists have blamed the global cost of living crisis in part on the war in Ukraine, along with the compounding effect of ongoing Covid-19 restrictions in China, other effects of the pandemic, supply-chain problems, climate change and inflation itself.
Upasana Dutt, who led the cost of living survey this year and last year, said the war in Ukraine is one of two main factors, along with the epidemic.
“What we’re seeing is a disruption in the supply chain and that’s only because of the war,” he said. “If there had been no war, such upheaval would not have been evident. It will be much more limited.”
As pandemic restrictions were eased, rising demand for commodities met with persistent disruptions in the supply chain, Dutt said, leading to higher inflation levels. Western sanctions imposed on Russia “have exacerbated the impact on commodity supplies everywhere.”
The report notes this effect in other European cities, where efforts to reduce dependence on Russian energy have seen gas and electricity prices rise by 29 percent in some areas, compared to a global average increase of 11 percent.
Globally, utility bills rose an average of 11 percent, and car prices rose an average of 9.5 percent, according to the EIU. The highest price increase in the report is for a liter of oil, which has increased by an average of 22 percent.
European cities of Luxembourg, Stockholm, Brussels, Lyon, France; and Manchester, England; Five of the 10 cities that fell the most in the rankings this year were cities – the result of weakening economies due to the energy crisis.
In the United States, 22 cities moved up in the rankings following rapid price increases. Cities including Atlanta, Charlotte, Indianapolis, San Diego, and Boston all saw increases in major cost of living rankings—among the top 10 largest such increases recorded globally.
While Istanbul, Buenos Aires and Tehran experienced the highest increases in inflation, the highest inflation rate was recorded in Caracas, Venezuela, where the cost of living increased by 132 percent in the past year.
The report expects some relief in 2023, if commodity prices “fall sharply,” unless the war in Ukraine escalates.
