Tel Aviv Drops to 8th Place in The Economist's Latest Ranking of Most Expensive Cities


by Ifi Reporter Category:Capital Market Nov 30, 2023

Tel Aviv, once topping the list two years ago, has slid to the 8th position in The Economist magazine's latest ranking of the world's most expensive cities. Last year's third-place ranking now sees Tel Aviv sharing the spot with Copenhagen. The city's descent is attributed to the recent conflict in Gaza, affecting exchange rates and subsequently influencing prices.

The survey, conducted between August 14 and September 11, revealed a global average price increase of 7.4% this year, slightly lower than the 8.1% jump in the previous year. Analysts express optimism about a potential slowdown in inflation for 2024, despite the challenges posed by the ongoing geopolitical situation.

The impact of the Israel-Hamas war is predicted to contribute to a local recession in price increases due to damage to private consumption and essential services. However, on a global scale, further escalation of the conflict is expected to drive up energy prices. Additionally, researchers highlight the potential for El Niño's effects on climate to intensify, causing a surge in global food prices.

The survey, comparing over 400 prices in 173 cities, acknowledges criticisms of such comparative rankings, emphasizing the oversight of cultural differences and consumption habits. Nevertheless, certain cities, including Singapore and Zurich, have consistently featured in the list for over a decade.

Singapore, appearing for the ninth time in the last 11 years, shares the top position with Zurich, which rose from sixth place last year. New York, last year's co-leader with Singapore, dropped to third place, tied with Geneva. Other cities in the top ten include Hong Kong, Los Angeles, Paris, San Francisco, and Copenhagen.

The survey also highlights the significant drop in rankings for Moscow and St. Petersburg, down 105 and 74 places, respectively. Chinese and Japanese cities experienced declines due to currency weakening, with Carretero in Mexico witnessing the most substantial jump, surpassing 48 places in this year's ranking.

At the bottom of the list, Damascus remains the cheapest city, despite a substantial 321% increase in its price basket in local currency terms. Caracas, Venezuela, holds the unfortunate title of the city with the highest inflation, standing at 450% in the last year.

Note: The survey's data collection concluded before the onset of the war in Gaza, and the subsequent impact on prices is a subject of ongoing observation.



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