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December 02, 2022 at 12:59 PM
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Prices have risen by an average of 8.1% in local-currency terms over the past year in the world’s biggest cities, according to the latest Worldwide Cost of Living survey from the Economist Intelligence Unit.
EIU said this is the fastest rate in at least 20 years. It reflects a global cost-of-living crisis brought on by the war in Ukraine and China’s continuing coronavirus restrictions. Gasoline prices have increased most rapidly, but utility and food prices have also risen sharply.
The survey, which was conducted between Aug. 16 and Sept. 16, tracks the prices of more than 200 goods and services in 172 cities worldwide — Kyiv had to be excluded from this year’s survey because of Ukraine’s war with Russia.
High inflation is not the sole factor that drives the WCOL’s annual ranking of the world’s most expensive cities. A stronger currency tends to push up a city in the rankings, as prices are higher when expressed in international common currency. In addition, structural factors such as competition or high demand also play a key role in determining the cost of living.
EIU noted that because researchers convert local currency prices into U.S. dollars to calculate each city’s index, the rankings are also driven by exchange rates against the dollar. This year, the greenback has strengthened against many currencies as the U.S. Federal Reserve has raised interest rates.
Among the new survey’s findings, Istanbul, Buenos Aires and Tehran have seen very high inflation, but the highest inflation rate is in Caracas, where WCOL prices have risen by 132% since last year. EIU said that although Venezuela’s hyperinflation has slowed sharply since 2019, it continues to exclude the city from its global averages in order to avoid skewing the calculations.
Damascus, Syria, and Tripoli, Libya, remain the cheapest of the 172 cities covered by the survey.
See the gallery for the most expensive cities in the world, according to the Economist Intelligence Unit.
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