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LONDON (AFP) – Paris and Zurich joined Hong Kong as the world’s most expensive cities this year, while Singapore and Osaka slipped from their joint leadership position after the coronavirus pandemic weakened the US dollar, showed a poll released Wednesday (Nov 18). .
The biggest driver was Tehran, which jumped 27 places with the US sanctions, added The Economist Intelligence Unit in its 2020 Global Cost of Living report.
However, the effect of the pandemic on the dollar was the most important factor in the change of location, the financial research group noted.
“The Covid-19 pandemic has caused the US dollar to weaken, while the currencies of Western Europe and North Asia have strengthened against it, which in turn has modified the prices of goods and services.” said Upasana Dutt, head of global cost of living at The EIU.
The EIU said that “Singapore and Osaka, which have been evicted from their first set with Hong Kong, are in fourth and fifth rank, respectively, with Osaka tying with Tel Aviv.
“The move by Paris and Zurich to join Hong Kong in first place was driven by the rise of the euro and the Swiss franc against the US dollar, as well as the comparative decline in the cost of living in the two Asian cities that previously sat on top of the table, “he added.
The report noted that prices in Singapore fell due to the exodus of foreign workers.
“With the general population of the city-state contracting for the first time since 2003, demand has dropped and deflation has begun.
“Osaka has seen similar trends, with consumer prices stagnant and the Japanese government subsidizing costs like public transportation.”
New York, the city the index is compared to, and Los Angeles fell in the rankings.
The Big Apple fell one place to seventh along with Geneva, and Los Angeles fell to ninth, as did Copenhagen.
“The coronavirus pandemic has affected spending habits around the world, and the prices of essential goods have proven to be more resilient than those considered nonessential,” the report said.
“However, this means that the prices of basic products, such as coffee, cheese, rice and orange juice, remain stable, rather than necessarily increasing.
“Clothing was the only category that saw an average drop in the index … (as) many consumers delayed changing clothes.”
With office workers doing their work from home, consumer electronics saw the biggest price increases due to production shortages, the EIU added.
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