Tel Aviv has been ranked the eighth most expensive city to live in, moving down five notches from last year, according to a worldwide survey released on Thursday.
The Worldwide Cost of Living survey by the Economist Intelligence Unit (EIU) was conducted before the outbreak of the war with the Hamas terror group, which has “affected the exchange rates in Israel and may have made it harder to procure some goods in Tel Aviv, thereby affecting prices,” it was noted in the report.
Ranked in 2021 as the most expensive city in the world to live in, Tel Aviv last year lost its inglorious title and ranked third, according to the survey.
For Israelis, the cost of living rose sharply last year, as inflation accelerated above 5 percent and housing prices soared almost 20%. Since the start of the year before the outbreak of the war in October, both inflation and housing prices started to slow down.
Israel’s annual inflation rate over the past 12 months has eased to 3.7% in October and has been declining from 4.1% in August, but it is still above the government target range of between 1% to 3%.
At the same time growing political uncertainty over the contentious judicial overhaul proposed at the start of 2023 put pressure on the shekel, leading to sharp declines in the value of the local currency.
Singapore held its top spot as the most expensive city to live in, for the ninth time in 11 years, according to EIU’s global survey. It shares the top spot with Zurich, which moved up from sixth place thanks to the strong Swiss franc, to replace New York now in third position, tying with Geneva.
Hong Kong and Los Angeles rounded out the top five most expensive places, while Damascus remained the cheapest of the 173 cities covered in the survey.
The worldwide survey conducted between August 14th and September 11th this year showed that the average cost of living rose by 7.4% in local currency terms over the past year in the world’s major cities, as supply-chain disruptions have somehow eased and interest rates have risen. This is slightly slower than the 8.1% price growth recorded a year earlier, but still “significantly higher than the trend in 2017 to 2021,” according to EIU.
The bi-annual survey tracks 400 individual prices across 200 goods and services. These include prices for food, drink, clothing, household supplies and personal care items, home rents, transport and utility bills.
Western Europe, which accounts for four of the top 10 most expensive cities in the world, has seen “sticky inflation in groceries, clothing and personal care along with appreciation of the euro and other local currencies in the region [which] have led them to rise up the rankings,” the EIU said.
“The slowdown in inflation in 2023 has been, at best, modest,” the EIU said. ”In 2024 we expect the lagged impact of interest-rate rises to slow down economic activity, and in turn, consumer demand.”
“But upside risks remain – further escalations of the Israel-Hamas war would drive up energy prices,” the EIU cautioned.