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15 Mar 2018 12:55
The EIU’s findings showed that on average, the global cost of living had remained relatively static over the last year. (Delwyn Verasamy/M&G)
As anyone who has been to a supermarket lately knows, the cost of living in South Africa is rising dramatically. New research from the Economist Intelligence Unit (EIU) confirms this trend, showing that Pretoria and Johannesburg are becoming much more expensive for the average citizen.
In the 2018 Worldwide Cost of Living report, the two cities were both included in the top 10 list of cities where the cost of living had increased the most over the past year.
Johannesburg rose 11 spots to become the 105th most expensive city in the world, while Pretoria rose 13 places up the rankings and is now the 110th most expensive city in the world.
Things could be worse, however.
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“Despite topping the ranking, Singapore still offers relative value in some categories, especially compared with its regional peers. For categories such as personal care, household goods and domestic help Singapore remains significantly cheaper than its peers, but it remains the most expensive place in the world to buy and run a car and the third-priciest destination in which to buy clothes,” said the EIU.
The EIU’s findings showed that on average, the global cost of living had remained relatively static over the last year. “Last year deflation and devaluations were prominent factors in determining the cost of living, with many cities moving down the ranking owing to currency weakness or falling local prices. Both prices and a number of currencies rallied during 2017, and although inflation in many cities has remained moderate, the impact is reflected in the average cost of living.
“Taking an average of the indices for all cities surveyed using New York as base city, the global cost of living has risen to 74% [of what it would cost to live in New York], up slightly from 73% last year. This remains significantly lower than five years ago, when the average cost of living index across the cities surveyed was 85.5%,” the report said.
The cheapest cities in the world are Damascus in Syria and Caracas in Venezuela. “As Damascus and Caracas show, a growing number of locations are becoming cheaper because of the impact of political or economic disruption. Although the Indian subcontinent remains structurally cheap, instability is becoming an increasingly prominent factor in lowering the relative cost of living of a location. This means that there is a considerable element of risk in some of the world’s cheapest cities. Karachi, Algiers, Almaty and Lagos have faced well-documented economic, political, security and infrastructural challenges, and there is some correlation between The Economist Intelligence Unit’s cost of living ranking and its sister ranking, the liveability survey. Put simply, cheaper cities also tend to be less liveable,” said the EIU.
Read more from Simon Allison
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