Shreya NairThe COVID-19 pandemic has had significant effects on the cost of living in many countries. These changes to spending patterns and the falling of prices are reflected in the renewed list of the most expensive cities in 2020. No longer at the top spot, Singapore is now ranked number four on the list of the most expensive cities to live in!
Osaka which was also ranked number one along with Singapore and Hong Kong has dropped to the number five position. Osaka shares this position with Tel Aviv. Hong Kong, however, still remains on top and now shares this position with Paris and Zurich. These cities were previously ranked number five.
The focus of this year’s report on the most expensive cities was the effect the pandemic had on the prices of consumer goods. The report considered factors such as currency volatility, supply chain problems, the impact of taxes and subsidies, and shifts in consumer preferences.
Why have the ranks changed?
One of the biggest factors for the change in ranks was the effect the pandemic had on the US dollar. The pandemic resulted in the weakening of the US dollar. Western European countries and north Asian countries on the other hand strengthened against it. Furthermore, there was also a comparative decline in the cost of living in both Osaka and Singapore.
The Economic Intelligence Unit (EIU) also identified other reasons for changing ranks which include:
- Supply-chain problems such as shortages of essential items
- Government action such as price controls
- Decreased spending due to fall in incomes
- Changes in lifestyles affecting shopping habits
Image credit: The Economist Intelligence Unit
Also read: Singapore’s Phase Three of Reopening: What You Need to Know!
Why has Singapore’s rank changed?
The summary report provided by the EIU also stated that prices in Singapore also fell due to an “exodus of foreign workers”. Additionally, Singapore’s population size had decreased for the first time since 2003. These factors contributed to a fall in overall demand causing deflation.
Singapore has been consistently ranked at the top position as the most expensive city in the world since 2014. In the year 2019, Singapore shared its top position with Hong Kong and Paris before dropping to number four this year.
