Zurich has supplanted Tokyo as the most expensive city in the world, according to the Economist Intelligence Unit. The struggles in the EU seem to have pushed already pricey Swiss cities Zurich and Geneva into the top three most expensive cities, as the Swiss Franc keeps getting more and more valuable. From the EIU's Worldwide Cost of Living 2012 report:
Both Japan and Switzerland have seen strong currency movements over the last few years which have made them relatively more expensive. This has become especially true of Switzerland in the last year, where investors looking for a haven currency outside the beleaguered Eurozone have invested heavily in the Swiss Franc, prompting an unprecedented move by the Swiss government to peg the Swiss Franc to the Euro to keep the currency competitive.
Although Switzerland has long featured in, or around, the world’s most expensive cities, the strong swing in currency headwinds is responsible for Zurich’s current elevated position. In local terms the opposite has been true, with relatively cheaper imports and a stable economy keeping local price inflation low. This mirrors a similar situation in Japan over recent years which resulted in Tokyo and Osaka traditionally holding the unenviable title of being the world’s most expensive cities.
Local inflation in mature markets always has far less influence on the relative cost of living than the currency movements of the countries in question. This also explains the recent presence of Australian cities like Sydney and Melbourne in the ten most expensive locations as last year saw the Australian dollar pass parity with the US dollar from holding half that value a decade ago.
New Yorkers with empty pockets may be surprised to learn that their city isn't near the top of the list. In fact, no American city cracks the top ten this year. Here are the ten most expensive cities:
Read the EIU's release here.
02-17-2012 9:09 AM
Filed under: Japan, global business, cities, currency, Economist, Economist Intelligence Unit, Switzerland, tokyo, zurich, new york city, worldwide cost of living index, most expensive cities