The world’s most, and least, affordable cities are in Asia
An EIU survey highlights a region of cost-of-living extremes
No other region in the world is as diverse as Asia. Its regimes range from autocratic to democratic. Some Asian countries have populations that are among the world’s oldest, but in others they are relatively young.
To such contrasts, add differences in affordability. Asia is home to some of the world’s most expensive cities and also some of cheapest, according to the latest Worldwide Cost of Living Survey, a twice-yearly tally by EIU, our sister company.
At the top end of the index is Singapore, which was the world’s joint most expensive city in 2022, along with New York. At the other end, five of the 12 least expensive cities in the world are in South Asia.
Living costs in Karachi are about a third of those in Singapore—although it is also Asia’s hardest place to live, according to a separate EIU index. Our chart below shows price differences across the region.
Despite the high ranking of Singapore and Hong Kong, Asian cities became comparatively less expensive in 2022. Two Japanese cities, Tokyo and Osaka, were among the 20 most expensive worldwide in 2021, but they slid down the rankings in 2022, to 37th and 43rd respectively (and 11th and 15th in Asia).
Their decline was the sharpest among all 57 Asian cities surveyed by EIU. Even Colombo, in Sri Lanka, fell seven spots, despite an annual inflation rate that reached 70% last year (it ranked 53rd within Asia).
Part of this is explained by the survey’s methodology. It was designed to help companies make salary adjustments for the employees they send abroad. It compares the prices of more than 200 products and services in 172 cities—all converted into dollars. So when the greenback surges, as it did last year, cities outside America get cheaper in dollar terms. (And expats who convert their dollar salaries into local currencies get more for their buck.)
This was the case for people moving to Japan and Sri Lanka, whose currencies depreciated sharply. Spare a thought, though, for employees moving to America during that period; cities in America shot up the ranking.
Only a handful of cities in Asia became comparatively more expensive last year. The biggest jump was by Port Moresby, Papua New Guinea’s capital. It rose 13 places to 96th, making it the 36th costliest city in Asia—in part because the kina held firm against the dollar.
Several Chinese cities also became relatively more pricey. Nanjing and Wuxi both climbed ten places in the global rankings. The most expensive Chinese city was Shanghai, which ranked fifth in Asia and 17th worldwide. These places could become more expensive yet. With the lifting of covid restrictions in China, prices could surge in 2023.
Worldwide, however, EIU expects inflation to weaken this year. The overall effect on affordability will depend on how Asian currencies fare against the dollar. Differences in their performance could scramble last year’s rankings.
Source: The Economist