Named the most expensive cities in the world in 2022: Moscow has risen

The list of the most expensive cities in the world in 2022 was topped by New York and Singapore. As the Economist Intelligence Unit survey showed, rising energy prices lead to a sharp increase in inflation around the world, showed.

According to the Economist Intelligence Unit’s annual survey, New York was the world’s most expensive metropolis in 2022, sharing that dubious title with Singapore, as rising energy prices doubled inflation rates in the world’s major cities.

Last year’s most expensive leader Tel Aviv fell to third place, while Sydney climbed into the top 10, and Moscow and St. oil pushed prices up, according to the EIU report on the cost of living worldwide.

Rounding out the top five are Hong Kong and Los Angeles.

Venezuela’s capital, Caracas, with a price increase of 132% in 2022, fell well short of its 2019 hyperinflation rate of over 25,000%, but price increases remained too high for the city to be included in the study. Average inflation of 8.1% in local currency was still the highest in more than two decades of polls, up from 3.5% last year and 1.9% in 2020.

A stronger currency was also one of the factors that lifted the city’s rankings. Six of the eight most expensive metropolitan areas were US cities, led by Atlanta, which rose from 42nd to 46th place in the ranking of 172 cities surveyed. The US currency appreciated sharply against almost all currencies as the US Federal Reserve raised interest rates and signaled further increases.

Cities in countries whose currencies have plummeted made the list of the most expensive cities. Japan’s Tokyo and Osaka were among the top 10 falls, ranking 37th and 43rd respectively, up from 13th and 10th in 2021.

Stockholm and Luxembourg dropped the most, losing 38 places to 99th and 104th. Damascus in Syria and Tripoli in Libya retained their places as the cheapest cities in the ranking.

Singapore’s placement at the top of the index came as no surprise. The city-state was the second most expensive metropolitan area in 2021 and has held the No. 1 position for eight of the past 10 years. This year, the “Big Apple” (i.e. New York) took first place among the most expensive cities for the first time.

All three British cities surveyed have dropped in the rankings, with London ranked 28th, up from 17th in 2021. Edinburgh was ranked 46th and Manchester ranked 73rd among the most expensive cities, up from 41st last year.

Australian cities have moved up the rankings overall, with Sydney climbing from 14th place last year to 10th in 2022. Melbourne is up to 15th from 16th last year and Brisbane is up to 32nd from 36th.

A global spike in inflation was gaining momentum before the outbreak of conflict in Ukraine in February disrupted the supply of basic commodities, especially food. The subsequent sanctions against Russia caused a further rise in prices for oil, gas and other energy products.

Rising gasoline prices produced the strongest fuel for higher inflation. On average, a liter of fuel in terms of local currency became 22% more expensive than a year earlier.

Gas and electricity prices in Western European cities were 29% higher, nearly three times higher than the 11% global average, as Western Europe struggles to find an alternative to Russian energy.

The consolation for some of these increases has been the “restrained” increase in the prices of leisure goods and services. “This may reflect lower demand as consumers have focused their spending on essentials,” the EIU said in a statement.

Barring some unforeseen disasters, the EIU predicts that cost growth will ease in 2023 as higher interest rates remove some of the pressure from demand and supply chain lockdowns begin to ease. The good news is that prices may start to come down in some countries as interest rates rise.

“We forecast that prices for energy, food and materials such as metals are likely to fall sharply in 2023 from 2022 levels, although they are likely to remain above previous levels,” the report says. “Global commodity prices should rise another 6.5% in 2023, but this will be a decrease from the 9.4% recorded in 2022.”