The city of Tel Aviv was named after the title in Hebrew of “Old New Land” (“Altneuland” in German), a visionary novel written in 1902 by Theodore Herzl, the founder of modern Zionism.
Israel’s commercial capital still blends modernity and history. This summer, as time-poor professionals were ordering coffee pods delivered by drone, archaeologists nearby were uncovering a Byzantine wine press and a 7th-century gold coin. Both discoveries might come in handy in the city that is now the world’s most expensive.
According to the latest findings of the Worldwide Cost of Living Survey from The Economist Intelligence Unit (EIU), our sister company, a strong shekel and rising prices for alcohol, groceries and transport have pushed Tel Aviv to the top of the ranking, up four places from last year. Paris, which shared the top spot with Hong Kong and Zurich in 2020, is now the second-priciest place to live, alongside Singapore. The survey, which compares the prices of more than 200 products and services in 173 cities around the world, is primarily used by firms to negotiate appropriate compensation when relocating staff, but it can also reveal pricing trends at both the local and global level.
Supply-chain problems related to the pandemic have pushed the price of goods up in much of the world. In September the cost of shipping a standard container was four times higher than a year earlier. Some cities experienced additional pressure. American sanctions imposed on Iran pushed its capital, Tehran, 50 places up the ranking to 29th. The price of the EIU’s basket of goods and services there has risen by 42% in local-currency terms since November 2020. But this is dwarfed by a 1,766% increase in Caracas, thanks in part to price controls imposed by Venezuela’s government. Even excluding a handful of such cities with very high inflation, the EIU’s data show average global prices have risen by 3.5% year-on-year in local-currency terms, compared with just 1.9% last year.
Prices have not risen everywhere. Rome saw the biggest drop, falling 16 places to 48th, with a particularly sharp decline in the clothing category as even fashionable Italians gave up dressing up for the home office. And most American cities have fallen in the rankings thanks to government stimulus injected into the economy during the pandemic. (New York remains the costliest American city, in sixth place.) But the general picture is one of disruption and higher prices. When the survey was undertaken, in August and September, the average cost of a litre of unleaded petrol across all cities was 21% higher than a year before. A huge rise in natural gas prices in Europe and Asia and panic buying at petrol stations in Britain occurred just too late to influence this year’s ranking. But they do not bode well for costs in 2022.
(Free) - Via The Economist
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