Singapore and Hong Kong no longer world's costliest cities: EIU

TEL Aviv has overtaken both Singapore and Hong Kong to become the most expensive city in the world, according to a 2021 report by the Economic Intelligence Unit (EIU). Singapore remains the costliest city in Asia, joining Paris for second place and jumping 2 spots from last year. Hong Kong is also among the world's costliest cities, slipping to fifth place from a joint-top spot last year.

Tel Aviv, Israel, has taken the top spot for the first time, rising from fifth place last year. This is mainly due to the shekel appreciating, making local costs more expensive against the US dollar. Approximately one-tenth of the city's goods experienced price increases, particularly in groceries and transport.

Around the world, supply chain disruptions and changing consumer demand have driven up the cost of living. The Covid-19 pandemic and restrictions continue to affect production and trade, according to the report.

Upasana Dutt, head of worldwide cost of living at EIU, said: "Similar to previous years, European and developed Asian cities remain at the top of the WCOL (Worldwide Cost of Living) rankings, but the global supply chain disruption has reshuffled the rankings of this edition with Hong Kong dislodged from its top spot last year while Singapore climbed 2 places to joint second with Paris."

The inflation rate is the highest in 5 years at 3.5 per cent year on year, compared to just 1.9 per cent last year.

Transport costs rose the fastest this year because of rising oil prices, leading to a 21 per cent increase in unleaded petrol. Additionally, the categories of recreation, tobacco and personal care costs also rose.

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Dutt expects costs of living to continue to rise over the coming year as wages increase in many sectors. Central banks may raise interest rates to stem inflation. She noted that as a result, price increases will start to moderate from this year's level.

READ MORE:

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