The Swiss National Bank’s decision on January 15 to scrap an exchange rate ceiling with the euro means Zurich and Geneva have leapfrogged Singapore to become the most expensive cities in the world.
Officially, Singapore retained the dubious honour of being the world’s priciest city, according to the Worldwide Cost of Living Survey, with an index score of 129 (New York is the base at 100).
Paris came in second (126), followed by Oslo (124), Zurich (121), Sydney (120), Melbourne (118) and Geneva (116), but the survey did not take into account the recent jump in value of the Swiss franc, and the Economist Intelligence Unit (EIU), which published the twice-yearly study on Tuesday, admitted that “at today’s exchange rates, Zurich and Geneva would be the world’s most expensive cities, with indices of 136 and 130, respectively”.
“The situation of an unchanged top five is very rare for the worldwide cost of living survey and disguises some significant global drivers that are impacting on the cost of living everywhere,” said Jon Copestake, editor of the report, which compares more than 400 individual prices across 160 products and services in 140 cities in 93 countries.
“In fact, a look at the data six months ago would have shown a different top five, and things are changing quickly. Rebasing the survey to today’s exchange rates would put Zurich top, highlighting how fluid the global cost of living has become.”
Karachi in Pakistan and Bangalore in India offer the best value for the money (both scored 44 in the index). Indian cities make up four of the six cheapest cities.
Weak confidence in the euro means Paris is the only eurozone city in the top ten. Despite a weakening currency, Paris remains structurally extremely expensive to live in, with only alcohol and tobacco offering value for money compared with other European cities.
The study authors pointed out that Paris was joined among the most expensive European cities by Oslo, Zurich, Geneva and Copenhagen, “perhaps reflecting that non-eurozone cities have become pricier in relation to their neighbours”.
They added that Asian cities tended to be the priciest locations for general grocery shopping, with Seoul becoming the most expensive location for everyday food items.
For example, an average-priced bottle of table wine currently costs $27.66 in Seoul (the ninth most expensive city overall), $25.24 in Singapore, $15.93 in Zurich and $8.49 in Geneva.
Twenty branded cigarettes will set you back $10.32 in Singapore, $9.46 in Zurich and $9.57 in Geneva. In Melbourne they cost $18.96.
“However, European cities tend to be priciest in the recreation and entertainment categories, with Zurich the most expensive, perhaps reflecting a greater premium on discretionary income,” the authors wrote.
The Worldwide Cost of Living
The Worldwide Cost of Living is a bi-annual Economist Intelligence Unit survey that compares over 400 individual prices across 160 products and services in 140 cities in 93 countries.
The survey itself is designed to calculate cost-of-living allowances and build compensation packages for expatriates and business travellers. The online interactive survey allows for city-to-city comparisons, but for the purpose of the report all cities are compared to a base – New York – which has an index set at 100.
More than 50,000 individual prices are collected in each survey, conducted each March and September and published in June and December. EIU researchers survey a range of stores: supermarkets, mid-priced stores and higher-priced specialty outlets. Prices reflect costs for more than 160 items – from food, toiletries and clothing, to domestic help, transport, and utility bills – in each city. These are not recommended retail prices or manufacturers’ costs; they are what the paying customer is charged.
swissinfo.ch and agencies