Magazines Archives - 2009 April
EIU study pins shift in ranking for cost of living on currency swing
DUE to currency dislocation, Asia now hosts both the most expensive and cheapest cities in the world, stated a study conducted by the Economist Intelligence Unit (EIU).
The EIUs most recent Worldwide Cost of Living Survey ranked two cities in Japan Tokyo followed by Osaka the worlds most expensive cities, unseating previous number one Oslo, which fell to fifth spot. Paris went down a notch to third place to replace Copenhagen, which was relegated to fourth position, based on the biannual survey, which ranks 132 countries globally.
Also listed among the most expensive cities were Singapore in 10th spot, up from 15th previously, and Hong Kong, which leapt to 11th from 23rd.
Meanwhile, Karachi in Pakistan has retained its standing as the cheapest city followed by Iranian city Tehran in the Middle East. The Philippine capital of Manila and Indias New Delhi and Mumbai were also among the bottom-listed at 126th, 129th and 130th, respectively.
[The result of the survey] highlights the way in which sharp shifts in exchange rates in recent months have altered the relative cost of living in cities around the world. By comparing the ranking of cities in September 2008 (when the price survey was conducted) to the ranking in February 2009 (adjusting the September price data for recent exchange-rate movements), it is possible to see which locations have been relative winners or losers as a result of the currency dislocation, said the research arm of publishing firm The Economist Group.
Factoring the February 2009 exchange rates into the survey has left a mixed impact on the ranking of Asian cities, as the region plays host to countries with the most and the least expensive cost of living, it added.
The study noted that the yen appreciation had shot the Japanese cities to the top of the rankings, while cities in Australia and New Zealand saw dramatic falls of between 21 and 25 index points due to the weakening of their currencies.
Sydney, the most expensive Australian city, fell to 35th place from 17th, and Melbourne slipped to 39th from 24th. Wellington, meanwhile, is now much less expensive, relative to other countries, than in September, moving down from 55th to 80th.
Chinese cities have become more expensive
Chinese cities, too, have become more expensive as the renminbi is tightly linked to the US dollar, making the relative cost of living in these cities rise as the currencies of other countries fall.
Shanghai was propelled nearer the top at 29th place from 49th before, with the EIU noting that this citys cost of living is now only 2% cheaper than in New York. Beijing also rose to 36th, up from 58th.
Taipei climbed 10 spots in the rankings to 57th from 67th, while Seoul fell to 66th place from 35th.
The Worldwide Cost of Living survey compares prices and products in 140 cities around the world.
According to the EIU, which can calculate indices based on any one of the cities, the data quoted in its latest comparative survey used New York as the base city for the price index of 100.
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