Cost of Living Index 2021

The Economic Intelligence Unit recently released Cost of Living Index 2021. According to the report, Tel Aviv of Israel is the most expensive city in the world.

Key Findings

• Tel Aviv is the world’s most expensive cities. It was followed by Paris in second place and Singapore in third place.
• In 2020, Paris was the most expensive city according to the index.
• In 2021, Zurich and Hong Kong were at fourth and fifth places respectively.
• Overall, the upper rankings were dominated by developed Asian cities and European cities.
• The lowest rankings were occupied by cities in Africa, Middle East and less wealthier parts of Asia.

Inference

The index shows that the overall prices of goods and services in the world have increased by 3.5%. In 2020, this was 1.9%.

Reasons for the increase in price rise

• The global supply chain was greatly affected due to the COVID-19 pandemic and its restrictions. This affected the production and trade all over the world. And eventually led to the price rise.
• The oil price rise played a major role in the price rise. The unleaded petrol prices increased by 21%.
• Apart from oil, the prices of recreation, personal care products and tobacco products also increased.

Notable Price rise cities

• The highest price rise was reported in the Iranian city Tehran. It jumped from 79^th rank in 2020 to 29^th rank in 2021. This was mainly due to US sanctions. The US sanctions led to shortages and higher prices.
• The Syrian city Damascus was ranked the lowest. This is because its war-torn economy is still struggling to recover.
• Both Damascus and Tehran are suffering from high inflation.
• The other cities that are suffering from high inflation are Buenos in Argentina and Caracas in Venezuela.

About Cost-of-Living Index

• The Cost-of-Living Index tracks the cost of living of 173 cities in the world. It compares more than 200 every day products and services.
• The index bench marks the prices against the prices in New York. Thus, the cities with currencies that are stronger than the US Dollars appear higher in the ranking.

Indian cities in the index

None of the Indian cities topped the first 20 ranks. However, Tokyo of Japan, Shanghai of China topped in first twenty ranks.

Month: Current Affairs - December, 2021