Tel Aviv's standing in the Economist magazine's list of the world's priciest cities has been on a downward trajectory: from being at the pinnacle two years ago, it slid to the third spot last year, and in 2023, it further descended to the eighth position, a spot it shares with Copenhagen, the capital of Denmark. It's worth noting, however, that these rankings were determined prior to the onset of the Gaza war, which, according to the survey editors, influenced Israel's exchange rates and subsequently, the prices.
Drawing parallels with historical military conflicts, market predictions indicate that the war could result in a deceleration of price hikes, owing to the impact on private consumption and the use of services like electricity, water, and gas. Conversely, the researchers point out that on a global scale, "another flare-up of the Israel-Hamas conflict could escalate energy prices, and the unexpectedly significant effect of El Niño (a temperature increase in the Pacific Ocean) on the climate could further inflate food prices." In a broader context, the steepest rise among the indices has been in grocery prices worldwide, revealing that it's not just in our country where retailers are prone to passing on higher costs to consumers. This, the researchers affirm, is a worldwide trend.
Despite this, the average global price increase this year was 7.4%, a decrease from last year's surge of 8.1%. This has led analysts to maintain a positive outlook, predicting a continued deceleration of inflation into 2024.
The survey, taking from August 14 to September 11 this year, compared over 400 product and service prices across 173 cities. It's worth noting, however, that such comparative rankings, primarily designed to assist international companies in determining the cost of relocating their employees from one country to another, often overlook cultural variances and consumption patterns.
Veteran heavyweight Singapore back at the top
In the ever-changing landscape of the world's most expensive cities, some have managed to maintain a consistent presence. Singapore is one such city, having secured a spot on the list nine times in the last 11 years. This year, it shares its rank with Zurich, a city that's no stranger to the list. Zurich climbed from the sixth spot last year, largely due to the robust Swiss franc and the sky-high costs of groceries, household items, and leisure activities. Anyone who's recently savored a fondue in a Zurich restaurant and been handed a 400-shekel bill can vouch for this. As for Singapore, it's the hefty price tags on private cars, clothing, and alcohol that have kept it high on the list, much like a climber persistently scaling a mountain peak.
Last year's joint title holder, New York, has slipped to the third spot, a position it now co-occupies with Geneva, another Swiss city featured on the list. Following in rank is Hong Kong in the fifth position, trailed by Los Angeles and then Paris, claiming the seventh spot. The top ten is completed with Tel Aviv and Copenhagen, ending with the third U.S. city mentioned in the lineup - San Francisco.
On the other end of the spectrum, Damascus, our neighboring city, retains its position as the least expensive city, despite a staggering 321% surge in its local currency price basket. This can be attributed to the withdrawal of government subsidies and import cost hikes due to explosions. Nudging above Damascus at the base of the list are Tehran and Tripoli. Caracas in Venezuela, ranking 144th in the list of most expensive cities, has the questionable distinction of having the highest inflation, a whopping 450% in the past year. However, this is somewhat of a silver lining compared to the over 25,000% inflation rates experienced in 2019.
Predictably, Moscow and St. Petersburg witnessed the most dramatic plunge in this year's rankings, hurtling down 105 and 74 places respectively, as if they were on a thrilling roller coaster ride. Also caught in this downhill momentum were cities in China and Japan, greatly affected by the depreciation of the yuan and yen currencies. Chinese cities, including Nanjing, Wuxi, Dalian, and Beijing, tumbled more than 25 spots, much like pieces on a game board. Meanwhile, Japan's Tokyo and Osaka fell 23 and 27 places respectively.
In stark contrast, 2023 saw the rise of Santiago de Querétaro and Aguascalientes in Mexico, who made significant strides up the ranking, attributed largely to the peso's robust performance as one of the most resilient emerging market currencies of the year.