Tel Aviv, Israel, was ranked as the most expensive city in the world, according to the Worldwide Cost of Living report released by the Economist Intelligence Unit on Wednesday.
Last year, the Mediterranean metropolis rose to the top spot from fifth place, beating out Paris and Singapore, which were tied for second place. The top American city on the list, New York, came in sixth, ahead of Hong Kong and Zurich. Los Angeles was the only other American city in the top 10, coming in at number nine, ahead of Osaka, Japan.
The strength of the currency, the shekel, when translated into dollars was a factor in the rise of Tel Aviv to the top, according to the report. The prices there increased by around 1.6 percent, followed by groceries, household goods, cars and fuel. The city was the second most expensive place to buy alcohol.
The report doesn't include property prices, but it noted that they have also gone up in Tel Aviv, especially in residential areas. Oren Kessler, a political analyst and author who moved to Tel Aviv from Washington D.C. two years ago, said that it was a major drain on locals wallets.
He said that the price of a renovated apartment in the capital is similar to that of an older place in Tel Aviv, despite the fact that the prices here are similar if not more expensive than in Washington, yet the salaries don't compare. At some point, most Israelis want to spend time here. It is a magnet in that sense. This year's inflation rate was the fastest in the past five years, at 3.5 percent. The number was pushed up by the rising cost of transport, as well as the cost of recreation, tobacco and personal care. In 2020, inflation increased by 1.9 percent, while it was up 2.8 percent in 2019 according to the report.
Although gas prices have gone up in the U.S. in recent months, no U.S. city has made the world's top 10 most expensive cities for gas. The list was led by Hong Kong, where it cost around $9.25 a gallon, followed by Amsterdam, where it was just over $8 per gallon. The average gas price, which is equal to just over a quarter of a gallon, was up 21 percent in the cities measured.
The index looked at the price of goods and services in 173 countries around the world.
The cost of living in many cities will go up over the next year as wages increase, according to Upasana Dutt, head of the global cost of living at the Economist Intelligence Unit. We expect central banks to raise interest rates cautiously to stem inflation. The price increases should start to moderate from this year's level. Damascus was ranked as the world's cheapest city just over 130 miles from Tel Aviv. The country's war-torn economy has struggled as prices there have fallen, according to the report. Tripoli, Kazakhstan, Tashkent, Tunis and Almaty, Kazakhstan rounded out the world's top five cheapest cities.