Israel city Tel Aviv has stepped over Hong Kong and Singapore to become the world’s most expensive city to live in, according to the Economist Intelligence Unit (EIU). Soaring inflation has augmented the cost of a range of goods and services across the world in the Covid pandemic.
For the first time ever, Tel Aviv climbed top on the EIU’s December 2021 worldwide cost of living index. It was placed in the fifth position last year.
The Israeli’s city has risen to the top spot mainly because of the country’s currency, the shekel’s value has towered against the dollar, the EIU said, “buoyed against the dollar by Israel’s successful Covid-19 vaccine rollout,” it added. The rise in the cost of living in Tel Aviv is also partly attributed to the increase in prices for transport and groceries.
The Worldwide Cost of Living Index is composed by correlating the prices of US dollars for goods and services with that of 173 cities.
Israel has been one of those countries in the world that vaccinated its population faster than others. Figures from Our World Data states that as of Monday, November 29, 62% of Israel's population had got double doses of the Covid vaccine.
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As per a Reuters report, in early November, the Israeli shekel was high by 4% against the US dollar year-to-date, however, since then has cut those additions.
Sharing the same joint spot Paris and Singapore are ranked second and third respectively, followed by Zurich and Hong Kong. New York was in sixth, with Geneva in seventh. Closing the list Copenhagen is placed at eighth, Los Angeles in ninth and Osaka, Japan in 10th.
The survey had placed Paris, Zurich and Hong Kong in the joint first place, last year.
Cost of several goods has risen in Tel Aviv. The EIU’s latest research has examined the prices of more than 200 products and services in 173 cities. On a whole, the EIU stated that the inflation rate of the prices it traced had increased by around 3.5% year-on-year in local currency terms to September 2021 and was just high by 1.9% last year.
The survey said that the inflation rates signified the fastest rise in the index over the past five years.
Collected in August and September, the data showed prices for freight and commodities pushed up on average costs rising up to 3.5% in the local currency terms, which is the fastest rising rate recorded over the past five years.
Rise in the prices of commodities and other goods have been attributed to the supply chain issues, fluctuations in currency exchange rates and changes in consumer demand, the EIU said, adding that the highest rise was seen in the transport industry with the price of gasoline per liter going up by 21% on average in 2021, stated the research.
In the coming year, prices are expected to swell further across many cities owing to an increase in pay, said Upasana Dutt, head of worldwide cost of living at the EIU.
She further said that social curbs due to the covid pandemic "have disrupted the supply of goods, leading to shortages and higher prices.”
"We can clearly see the impact in this year's index, with the rise in petrol prices particularly stark," she said, stating that central banks are presumed to hike the interest rates cautiously, to stem inflation. She also added that the increase in prices, therefore, will start to moderate from the current levels.
The average inflation number does not include four cities that already have exceptionally high rates: Caracas, Damascus, Buenos Aires and Tehran.
Tehran’s capital increased from 79th to 29th place in the ranking after US sanctions have scaled up the prices and created deficits.
Damascus was ranked the world's cheapest city to live in.
Here is the list of the most expensive cities in the world for 2021.
1. Tel Aviv, Israel
2. Paris, France
3. Singapore
4. Zurich, Switzerland
5. Hong Kong, China
6. New York, U.S.
7. Geneva, Switzerland
8. Copenhagen, Denmark
9. Los Angeles, U.S.
10. Osaka, Japan