SINGAPORE — Zurich and Paris have displaced Singapore and Osaka in a recent report on the world's most expensive cities. The two Asian cities previously joined Hong Kong at the top of the rankings.
That's based on The Economist Intelligence Unit's latest Worldwide Cost of Living index which shows how the coronavirus pandemic has affected the prices of goods and services in more than 130 cities as of September 2020.
"The Covid-19 pandemic has caused the weakening of the U.S. dollar while western European and north Asian currencies have strengthened against it, which in turn has shifted prices for goods and services," said Upasana Dutt, head of Worldwide Cost of Living at The EIU. New York City is used as the base city in the index.
"Asian cities have traditionally dominated the rankings in the past years but the pandemic has reshuffled the rankings of this edition."
Singapore, which is now in fourth place, saw prices fall because of an exodus of foreign workers, the report said.
"With the city state's overall population contracting for the first time since 2003, demand has declined and deflation has set in. Osaka has seen similar trends, with consumer prices stagnating and the Japanese government subsidizing costs such as public transport." Osaka shares fifth place with Tel Aviv.
Prices for most goods and services were "fairly flat" over the past year, but certain categories were affected because of the Covid-19 crisis, the EIU said.
The cost of essential products such as food and water stayed "resilient," but low demand caused clothing prices to fall sharply.
"Supply-chain problems have also had differing impacts on different goods, pushing up the price of high-demand products such as computers in some cities," the report said.
Dutt said such trends could continue in 2021 as spending remains restricted, putting pressure on prices.
"Many price-conscious consumers will prioritize spending on staples, home entertainment and faster internet access," she said. "Big-ticket items, as well as clothing and out-of-home recreation, will continue to struggle."