- The index is benchmarked against prices in New York City, hence cities with currencies that are stronger against the US dollar are likely to appear higher in the rankings.
Key-Highlights of the Index:
- Tel Aviv is the world’s most expensive city. It was followed by Paris and Singapore are jointly at second place. In 2020, Paris was the most expensive city according to the index.
- In 2021, Zurich and Hong Kong were at fourth and fifth places respectively.
- Overall, the upper rankings were dominated by developed Asian cities and European cities. The lowest rankings were occupied by cities in Africa, Middle East and less wealthier parts of Asia.
- It stated that prices for goods and services have risen by 3.5 per cent year-on-year, the highest inflation rate seen in the last five years.
Among the cheapest cities:
- Damascus (capital of Syria) is at the top. It is followed by Tripoli (Libya,) Tashkent (Uzbekistan), Tunis (Tunisia) and Almaty (Kazakhstan') in the ranking of cheapest cities.
- In India, Ahmedabad, Gujarat has been listed in the top ten cheapest cities of the survey.
What are the reasons in the increase in Price Rise?
- The global supply chain was greatly affected due to the COVID-19 pandemic and its restrictions. The affected the production and the trade all over the world and eventually led to the price rise.
- The oil price rise also played a major role in price rise.
- Apart from oil, the prices of recreation, personal care products and tobacco products also increased.
Note: The highest price rise was reported in the Iranian city Tehran. It jumped from 79th rank in 2020 to 29thrank in 2021. This was mainly due to US sanctions. The US sanctions led to shortages and higher prices.
About Economist Intelligence Unit (EIU)
- The Economist Intelligence Unit is the research and analysis division of The Economist Group, which is the sister company to The Economist newspaper.
- The EIU has been headquartered in London, United Kingdom. It is the leading resource that provides forecasting and advisory services through economic and business research across the world.
- The EIU also releases the Democracy Index, which provides a snapshot of the state of democracy worldwide in 165 independent states and two territories. India ranked at 53rd position in EIU's 2020 Democracy Index and was dubbed as flawed democracy.