“The Economist” names Tel Aviv world’s most expensive city

Tel Aviv is the most expensive city in the world, according to “The Economist”. Tel Aviv is ahead of Paris, Zurich, Hong Kong, and New York, and for the first time heads the list of the world’s most expensive places to live, after being ranked fifth last year.

The reason for the dubious honor is in part the appreciation of the shekel against the US dollar (the survey measures prices in US dollar terms), which the Economist Intelligence Unit (EIU) ascribes to Israel’s successful vaccination campaign against Covid-19. The numbers show that 62% of Israelis have had three doses of vaccine, and the shekel has appreciated against the dollar by 4%.

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The EIU Worldwide Cost of Living survey examined prices of goods and services in 173 cities, and found that, in Tel Aviv, prices of 10% of goods surveyed had risen. The global average rise in the prices of the items surveyed was 3.5% in the past year, versus 1.9% in the previous year, contributing to life becoming more expensive for most city dwellers. This year’s global price rise is the largest measured for five years.

Supply chain disruptions, exchange rate fluctuations, and changes on consumer demand led to this price rise, the EIU says. The largest increase was in the cost of transport, with an average rise of 21% in 2021, according to the survey.

The study also finds that many cities will see rising prices in the coming year, while central banks are expected to raise interest rates in an attempt to neutralize inflation.

The biggest drop in the rankings this year was by Rome, which fell from 21st place to 48th, thanks to significant declines there in prices of clothing and groceries. Other cities that have seen substantial price falls are Bangkok and Lima.

The biggest leap in the rankings was by Teheran, from 50th to 29th. The Iranian capital has been severely affected by supply problems, leading to shortages of goods, and by US sanctions, which have caused sharp rises in prices of imports. The lowest ranked city in the survey is Damascus, the cheapest city in the world in which to live.

Published by Globes, Israel business news – en.globes.co.il – on December 1, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.