Tel Aviv has surpassed Hong Kong, Paris, and Zurich as the most expensive city in which to live. The Israeli capital is recognized for its high real estate costs, as well as its high-end hotels, clubs, and restaurants. However, the quick rise in inflation that has driven up the cost of numerous goods and services globally in the aftermath of the COVID-19 epidemic has helped to make Tel Aviv the world’s most expensive city.
The list of most expensive countries was published in The Economist Intelligence Unit’s (EIU) latest ‘worldwide cost of living’ report, which was released on December 1st. The report considers the prices of 50,000 products and services from 173 countries. Tel Aviv climbed five places in the rankings, displacing the joint winners of 2020, Paris, Hong Kong, and Zurich. This year, Paris tied for second place with Singapore, while Zurich and Hong Kong also made the top five. New York was ranked sixth, after Geneva, Copenhagen, Los Angeles, and Osaka.
Tel Aviv’s first-place ranking was due in part to recent increases in transportation and groceries, as well as the strength of the national currency against the US dollar. The Israeli capital was also named the second most expensive city for alcohol and transportation, the fifth most expensive for personal care, and the sixth most expensive for recreation.
The Economist’s report, however, may be misleading, according to the Israeli newspaper Haaretz. In fact, the report compared dollar prices based on currency exchange rates and an average basket of goods purchased by households in 2018. During the pandemic, the Israeli shekel strengthened against the dollar and euro, owing primarily to Israel’s exports of high-tech goods. This is why, when converted into dollars, prices in Israel are now so high, especially for tourists visiting during the breakout of the Omicron variant. Furthermore, Israeli consumers must pay significantly more for basic goods than EU consumers. According to Upasana Dutt, head of worldwide cost of living at the Economist Intelligence Unit, Israel’s cost of living will continue to rise in the coming years, in line with a general increase in wages in many sectors.
This year’s ranking by The Economist includes forty new cities. Edinburgh was the highest new entry, ranking 27th. Stuttgart and San Diego were also among the top 50. Due to a sharp drop in grocery and clothing prices, Rome fell from 32nd to 48th place.