According to the Worldwide Cost of Living survey conducted this year, the average annual increase in local currency prices for over 200 commonly used goods and services was 7.4%. Although this is less than the record 8.1% increase from the previous year, price growth is still much higher than the trend from 2017 to 21. While 173 of the world’s major cities are covered in this year’s survey, as was the case last year, Kyiv (which was not surveyed in 2022) and Caracas (which is still experiencing hyperinflation) have been left out of the global average calculation.
According to this year’s survey, the most expensive cities were Zurich and Singapore. New York, which tied with Singapore for first place the previous year, dropped to third place as Zurich rose from sixth place to the top. The strength of the Swiss franc and the high cost of groceries, household goods, and leisure activities have helped Zurich, which has returned to the top spot after three years, climb up the rankings. Two Asian cities (Singapore and Hong Kong), four European cities (Zurich, Geneva, Paris, and Copenhagen), three US cities (New York, Los Angeles, and San Francisco), and Tel Aviv, Israel, make up our top ten overall this year.
Prior to the commencement of the Israel-Hamas conflict, the survey was carried out, which may have had an impact on prices by influencing exchange rates in Israel and making certain goods more difficult to obtain in Tel Aviv.
Among the ten categories we surveyed, utility prices—that is, household energy and water bills—saw the slowest rate of inflation worldwide. This was the category with the fastest rate of growth in 2022, and the moderation points to a reduction in the energy price shocks brought on by Russia’s incursion into Ukraine. Conversely, the rate of price growth for groceries was the fastest. Global food inflation has been persistent due to the fact that many producers and merchants have passed on increased prices to customers and because supply-side risks are still high due to the growing frequency of extreme weather events.
Conversely, cities in Western Europe and Latin America have risen in the list. Due to a combination of strong inward investment and rising interest rates, the peso proved to be one of the strongest emerging market currencies in 2023, propelling the Mexican cities of Santiago de Querétaro and Aguascalientes to the top of the rankings. In spite of persistent inflation and the strengthening of the euro and other regional currencies, European cities have generally risen in the rankings. Prices in Asia are still rising, but not much on average. Among the largest decliners in the rankings this year were two Japanese cities, Tokyo and Osaka, and four Chinese cities, Nanjing, Wuxi, Dalian, and Beijing.