Who knew there was a list season, but there is. Yesterday’s Happiest Countries list and last week’s Best Cities list are followed today by the Economist Intelligence Unit’s list of most expensive cities.
(To see the complete report as a .pdf, you have to register. But it’s worth it.)
If rising costs are a sign of increasing economic activity, then a lot of European cities are booming. (We’ll have a post on Europe’s little-noticed but surprising economic boom.)
Switzerland’s two financial centers are ranked just behind Singapore and Hong Kong. What’s most telling about the 2017 Economist list is that the United States has only one city on the list, New York. We checked last year’s list, and LA was No. 10. Not this year, pushed off the list by Osaka and Tokyo.
So, apparently Japan is back, hitting on all cylinders.
Here are the Top 10 most expensive cities in the world:
Making this list really is a mixed macro-economics blessing. It means yes, financial activity is humming along. But it also means cost of living in terms of skyrocketing food, housing and transportation costs could mean global talent looks at other options.
Researchers note that Paris is the only Euro Zone city among the 10 most expensive. Copenhagen, which pegs its currency to the euro, makes the Top 10 due to relatively high transport and personal care costs, according to the Economist Intel unit.
Clearly, the UK economy is showing signs of faltering, with Manchester and London dropping dramatically in the rankings.
In fact, the report is not very positive about the UK’s future:
The UK has already seen sharp declines in the relative cost of living owing to the Brexit referendum and related currency weaknesses. In 2017 these are expected to translate into price rises as supply chains become more complicated and import costs rise. These inflationary effects could be compounded if sterling stages a recovery.
What’s most surprising is the crazy prices you have to pay in the world’s most expensive cities for the most ordinary commodities (New York is the Cost of Living benchmark of 100), which is what makes this research fresh every year.
The citizens of Seoul pay about $15 for a loaf of bread (almost twice the COL basis of $7.95 in New York), up from about $12.50 last year. By comparison, Copenhagen is a bargain at $3.35, less than half the NYC basis price. (Check out Almaty, Kazakhstan, the bargain basement of bread at .90 cents, and where a liter of gas only costs .49 cents.)
You’ll want to be a smoker in Tokyo and Osaka, where a pack of cigarettes is only $4.45, and a drinker in Geneva, where a bottle of table wine is $8.06.
The most stunning illustration of dropping prices is the cost of gas, which has dropped precipitously during the past five years in all of the Top 10 cities, but most dramatically in New York – dropping by 50 percent to .63 cents per liter from $1.12 per liter.
This year’s Economist list seems to indicate the Japanese economy is back, with Tokyo – the most expensive city back in 2012 – and Osaka back in the Top 10.
Here’s the Economist Intelligence Unit methodology:
More than 50,000 individual prices are collected in each survey, conducted each March and September and published in June and December. Economist Intelligence Unit researchers survey a range of stores: supermarkets, mid-priced stores and higher-priced speciality outlets. Prices reflect costs for more than 160 items in each city. These are not recommended retail prices or manufacturers’ costs; they are what the paying customer is charged. Prices gathered are then converted into a central currency (US dollars) using the prevailing exchange rate and weighted in order to achieve comparative indices.