Zurich drops to fourth in ranking of most expensive cities

Zurich consistently ranks as one of the most expensive cities in the world. © Keystone / Gaetan Bally

Soaring inflation, supply chain disruptions and high oil prices have shuffled this year’s ranking of the most expensive cities compiled by the Economist Intelligence Unit. Zurich drops from first to fourth, as Tel Aviv takes the top spot.

Geneva, the other Swiss city in the top ten, came in seventh – the same spot as last year in the annual Economic Intelligence Unit’s Worldwide Cost of Living surveyExternal link published on Wednesday. Zurich had tied for first place with Paris and Hong Kong in the 2020 ranking.

This may say less about the cost of living in Switzerland’s finance and banking capital and more about the rapid rise in prices in other cities. Tel Aviv moved five places in this year’s ranking, above Paris and Singapore, which tied for second place. This is the first time the Israeli city has been listed as the most expensive.

The EIU writes that Tel Aviv’s rise is largely the result of the strength of the Israeli currency, the shekel, against the US dollar and increases to grocery and transport prices. High oil prices and the rising cost of consumer goods affected other cities in this year’s ranking. Tehran saw the biggest change moving from 79th to 29th place as US sanctions caused shortages and price increases. 

The EIU’s Worldwide Cost of Living Index collected data from 50,000 goods and services in 173 cities in August and September as prices for freight and commodities rose. On average, prices rose by 3.5% compared with 1.9% this time last year. Many countries have been affected by trade restrictions and pandemic-induced labour shortages and ongoing supply chain disruptions. This is the fastest rise in the cost of living for city dwellers in five years. The average cost of a litre of unleaded petrol has soared by 21%, the survey found.

“Although most economies across the world are now recovering as Covid-19 vaccines are rolled out, many major cities are still seeing spikes in cases, leading to social restrictions. These have disrupted the supply of goods, leading to shortages and higher prices,” said Upasana Dutt, head of the Worldwide Cost of Living survey at EUI.

There were some countries that saw prices fall. Rome saw the biggest drop as it fell 16 places to 48, with a particularly sharp decline in the cost of groceries and clothing. Bangkok and Lima were the second-biggest movers down the rankings, with significant declines in all categories.