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If you are looking to take a budget holiday in the new year, it seems there are some metropolises that might not be the best for your wallet. A new report has found the most up-to-date figures for the cost of living in major cities around the world, with some rising through the financial ranks in the last 12 months.
Conducted by The Economist Intelligence Unit (The EIU) the latest Worldwide Cost of Living Index found that Western Europe is home to some of the most expensive cities in comparison with those in the Americas, Africa and Eastern Europe.
Of these, the data discovered that it was Zurich, in Switzerland, that came top of the list for costly living.
It was followed closely by French capital Paris.
Both of these have moved up the list in the last year, overtaking the likes of Osaka and Singapore.
The European hotspots were not the only cities that zoomed up the list in the last year, though.
Hong Kong also climbed the list beyond the previous costly cities, coming in third place behind the European capitals.
According to the EIU: “Prices in Singapore fell as the pandemic led to an exodus of foreign workers.
“With the city state’s overall population contracting for the first time since 2003, demand has declined and deflation has set in.”
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However, by analysing the cost of 138 goods and services in 130 cities, they found that the cost of living had increased in many places.
Of the 10 categories of consumer goods covered in the report, tobacco and recreation (including electronics) saw the biggest price increase.
Meanwhile, clothes have seen the biggest price decrease globally.
One major reason for the shift in pricing came down to the exchange rates, which saw significant shifts over the course of 2020.
“In general, currency weakness has followed the pandemic as it spread across the world from Asia
to Latin America,” state The EIU.
“By September 2020, when our survey was taken, currencies were weakest in the Americas and strongest in Western Europe.”
This is particularly concerning for those who are looking to exchange travel money, as rates are continuously fluctuating.
Other reasons for changes to the cost of living in major urban areas include supply-chain problems due to border closures, government actions, a fall in disposable incomes and changes in lifestyles as a result of lockdowns.
Other costly cities listed in the report included Singapore, Osaka in Japan, Tel Aviv in Israel, New York City in the US, Geneva in Switzerland and Los Angeles in the USA.
No UK city was included in the EIU index.
Along with the most expensive cities, however, the report also discovered which cities had slipped down the ranking, with prices notably lower.
Reykjavik in Iceland was the city that saw the greatest cost of living decrease, with goods and services lowering prices.
Brazilian metropolises Sao Paulo and Rio de Janeiro also saw prices fall.
According to the experts, these price changes are likely to stay well into the new year.
It could be good news if you’re planning on a holiday, should the travel ban in the UK and global border closures be eased.
Holidaymakers looking to save money could jet off to a destination where the cost of living has decreased.
Upasana Dutt, Head of Worldwide Cost of Living at The Economist Intelligence Unit, said: “The COVID-19 pandemic has caused the US dollar to weaken while western European and north Asian currencies have strengthened against it, which in turn has shifted prices for goods and services.
“The pandemic has transformed consumer behaviour, as lockdowns and trends such as working from home have increased the prices of consumer electronics and meal-at-home kits have taken the place of restaurant dining for middle-class families.
“Although much will depend on the course of the pandemic, we expect many of the above price trends to continue into 2021.”
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