JAKARTA - The year 2021 is the toughest year economically for all countries in the world. Supply chain bottlenecks and changing consumer demand have pushed up the cost of living in many of our largest cities, according to new research published earlier this month, and inflation has been the fastest in five years.
One city has been changing more rapidly than most, jumping from fifth to first in this year's World Cost of Living index released by the Economist Intelligence Unit (EIU).
Citing CNN December 1, the city of Tel Aviv in Israel was ranked first for the first time the status of the most expensive city in the world. Tel Aviv overtook last year's leader Paris, now in second place with Singapore, to become the city with the highest cost of living in 2021.
The EIU attributes Tel Aviv's sharp rise in the index to rising food and transportation prices, as well as the strength of the Israeli shekel against the US dollar.
Everyday goods and servicesThe 2021 World Cost of Living Index tracks the cost of living in 173 global cities, an increase of 40 cities more than last year, comparing the prices of more than 200 everyday products and services.
Survey data that has been carried out for more than three decades is collected by the EIU global research team every March and September.
The index is compared to prices in New York City, so cities with currencies that are stronger against the US dollar are likely to appear higher in the rankings.
Zurich and Hong Kong are ranked fourth and fifth respectively, having held the top spot last year with Paris. New York, Geneva, Copenhagen, Los Angeles and Osaka round out the other top 10.
The top rankings continue to be dominated by developed European and Asian cities. Meanwhile, the lowest-ranking cities were mainly in the Middle East, Africa and less affluent parts of Asia.
Pandemic problemIn the report, the EIU also said that, on average, the prices of goods and services covered by the index have increased by 3.5 percent year on year in local currency terms, compared to an increase of only 1.9 percent last year.
The widely reported global supply chain issues have contributed to rising prices and the COVID-19 pandemic, and social restrictions are still affecting production and trade around the world. With the Omicron variant of the new coronavirus currently causing widespread concern, this problem is not going away quickly.
Rising oil prices led to a 21 percent increase in unleaded gasoline prices, the EIU reported, but there were also big price increases in the leisure, tobacco and personal care categories.
The city with the highest increase in 2021 was Tehran City in Iran, which jumped 50 places from 79th to 29th, as Washington sanctions resulted in shortages and higher prices.
Meanwhile, the Syrian City of Damascus once again ranks as the cheapest city in the world, as its war-torn economy continues to struggle. Damascus and Tehran suffer very high inflation in 2021, as will Caracas in Venezuela and Buenos Aires in Argentina.
Separately, Upasana Dutt, head of Worldwide Cost of Living at EIU, said in a statement: "Although most economies worldwide are now recovering as the COVID-19 vaccine is rolled out, many major cities are still seeing a spike in cases, leading to social distancing. has disrupted the supply of goods, leading to scarcity and higher prices.
We can clearly see the impact in the index this year, with the increase in gasoline prices very striking. However, not all cities experienced price increases. Many of the cities that are bottom of us have seen prices stagnate or even fall, in part because their currencies have weakened against the US dollar.
"Over the coming year, we expect to see the cost of living rise further in many cities as wages rise in many sectors. However, we also expect the central bank to raise interest rates, with caution, to stem inflation. So price increases should start to moderate from this year's level," he said.
World's Most Expensive City to Live in 20211. Tel Aviv, Israel
2. (tie) Paris, France
3. (tie) Singapore
4. Zurich, Switzerland
5. Hong Kong
6. New York City, New York
7. Geneva, Switzerland
8. Copenhagen, Denmark
9. Los Angeles, California
10. Osaka, Japan
11. Oslo, Norway
12. Seoul, South Korea
13. Tokyo, Japan
14. (tie) Vienna, Austria
15. (tie) Sydney, Australia
16. Melbourne, Australia
17. (tie) Helsinki, Finland
18. (tie) London, UK
19. (tie) Dublin, Ireland
20. (tie) Frankfurt, Germany
21. (tie) Shanghai, China
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