The annual ranking carried out by the British weekly The Economist has just crowned New York for the first time as the most expensive city in the world. The American city shares this joint first place with Singapore, already accustomed to this position.
New York and Singapore tied
A great first for New York! The city in the United States has just been named the most expensive city in the world by The Economist. New York shares this place with Singapore, (for the eighth time in ten years), the two cities having arrived tied. As a reminder, the previous year it was Tel Aviv, the economic heart of Israel, which had won first place. “Prices have soared by 8.1% on average over one year (in local currency) in 172 major cities around the world, the largest increase recorded for at least 20 years” indicates the 2022 report on the cost of living. Result, the price of gasoline has increased by 22%, and electricity and gas by 11%. The big bosses? The Covid-19 pandemic and the war in Ukraine. All global trade is impacted, which therefore has repercussions on supply chains.
The soaring dollar impacts the ranking
Currency effects also played a role in this ranking. Indeed, the ranking is made after the conversion of prices into dollars, which usually serves as a safe haven during crises. However, the dollar has soared lately and has therefore caused the euro to fall to its lowest level in twenty years. As a result, prices are therefore lower outside the United States. At the same time, the cost of living is more expensive in major American cities. Los Angeles ranks fourth in the rankings and San Francisco comes in eighth.
Moscow wins places, Paris loses
If the American cities flew away for this classification, it is also the case of certain Russian cities. Moscow and St. Petersburg rose strongly, with the Russian capital moving up 88 places to 37th position. The rise in prices in Russia can be explained by the effect of Western sanctions but also by a dynamic energy market which is supporting the rouble. In Europe, the energy crisis weighed on the euro, causing major cities to fall in the rankings. Paris thus loses four places and arrives in ninth position. For its part, Lyon lost 34 places to occupy the ninetieth of the classification. Unfortunately, if the cost of living seems to be decreasing in absolute value, this does not change anything for the inhabitants. The only ones to benefit from it are those who arrive from outside, who will therefore pay less compared to their currency. However, leisure prices have not increased, due to “weaker demand, as consumers focus their spending on essential goods”, explains The Economist, thanks to a survey carried out between August 16 and November. September 16, 2022. The media reports that inflation will continue but is expected to slow down.
