The cost of living in the eurozone has soared in comparison with the rest of the world, according to a new portrait of living costs around the globe.
The survey, compiled by the Economist Intelligence Unit, sampled the prices of a host of goods and services, ranging from a carton of milk to the cost of hiring a babysitter.
While Tokyo remains the world’s most expensive city, followed by Osaka, the strengthening of the euro against the dollar has increased the cost of living in many European cities.
There is a striking variation in prices, a litre of milk costing 22p in New Delhi and 84p in Rome.
The rent of a two-bed flat varies dramatically even between cities in the developed world. In London the average is given as just over £1 000 a month while in Tokyo a flat in an equivalent area is nearly three times more expensive.
William Ridgers, editor of the Worldwide Cost of Living Survey, said: ”There are intrinsic reasons why a city can be expensive. ”If you take London, you’re looking at somewhere where the cost of rent and shop space is high, salaries are relatively high, transport is expensive.
”All of these things go to make somewhere like London, Tokyo or Oslo expensive. But the way that it moves is determined by things like inflation or exchange rate.”
Several cities in the eurozone have become more expensive to live in, Dublin climbing 34 places to become the world’s 24th most expensive city and Frankfurt rising 33 places to 22nd. The cheapest city in the EU is Lisbon, ranked 68th in the world.
For the first time in recent years London is no longer the EU’s most expensive city. At 10th place it has been overtaken by both Paris and Copenhagen, the latter outside the eurozone but having a currency pegged to the euro.
Oslo and Zurich, which are outside the EU, remain the most expensive cities in Europe — respectively the world’s third and fourth dearest.
Dollar down
As the dollar has weakened against the euro, US cities have become comparatively less costly to live in over the past 12 months. New York is the most expensive American city, ranked 13 in the world, followed by Chicago and Los Angeles.
The cost of living in China has decreased too, because its currency is pegged to the weakening dollar. Prices there are also continuing to fall as more Western imports become available to Chinese consumers.
The survey, which is aimed at the international business community, also notes differences in recreational opportunities, transport, crime and other lifestyle factors.
London is described as ”an international city with a wide range of attractions to cater to almost all recreational requirements”.
”It is particularly famed for the West End, one of the world’s leading theatre districts … restaurants are plentiful.”
Moscow is noted for ”its rich cultural lifestyle … the city has around seventy museums and art exhibitions.
”Tickets for ballet, opera, jazz and classical concerts may be difficult to acquire and expatriates are expected to pay more than Russian citizens for some activities.”
By contrast, Nairobi has few nightclubs and no theatres or concert venues.
Although the survey notes that murder rates are declining in Johannesburg ”rates of rape, robbery, hijacking and burglary are extremely high.”
But the report also says that Johannesburg’s transport infrastructure is the ”best in Africa”.
One byproduct of rising wealth in Japan has been an explosion in car ownership, the survey says, from just 22% in 1970 to 84% in 2002.
”The resulting congestion on highways and in urban areas is compounded by the fact that the Japanese tend to take trips at the same time, for example when schools close or during public holidays.”
In New Delhi security guards (costing £43 for an 8-hour shift) are ”considered essential for expatriate homes and offices,” it says.
”Cars are provided with additional locks. It is not recommended that expatriates travel alone at night.”
The report found Tehran to be the cheapest city in the world — its cost of living was less than a quarter of Tokyo’s. – Guardian Unlimited Â