New York becomes the most expensive city in the world

 The American flagship city is, this year tied with Singapore, a regular of the first place of the annual ranking carried out by the British weekly "The Economist". Paris fell four places to ninth place in this ranking.

This is a first that the flagship city of the United States would probably have done well. New York has indeed become, for the first time, first in the annual ranking of the most expensive cities in the world, published this Thursday by "The Economist".

The city is now tied with Singapore, a regular in first place in this ranking. Both cities dethrone Tel Aviv, the cultural and economic heart of Israel, which dominated the ranking last year. Paris is in ninth place, ahead of Copenhagen and behind San Francisco.

A ranking biased by the soaring dollar

The upheavals in this ranking are largely linked to the global crisis and its repercussions on prices and the cost of living. "Prices soared by 8.1% on average year-on-year (in local currency) in 172 major cities around the world, the largest increase recorded in at least twenty years," says the British weekly in its 2022 report on the cost of living. These increases notably reflect the impact "of the war in Ukraine and the ongoing pandemic-related restrictions (which) are disrupting supply chains" and particularly affect "energy and food".

However, this ranking is biased by monetary effects: it is made after converting prices into dollars. However, the dollar, traditionally a safe haven in times of crisis, has strengthened strongly in recent months, to the point of causing the euro to fall to its lowest in twenty years: its rise is therefore reflected in lower prices outside the United States. American cities, therefore, climb mechanically in the ranking and three of them find themselves in the Top Ten of this ranking: New York, Los Angeles (fourth), and San Francisco (eighth).

Moscow and St. Petersburg on the rise

Moscow and St. Petersburg, which have seen their prices soar, also jump in this ranking. The Russian capital gained 88 notches to reach 37th place, under the effect of Western sanctions and a dynamic energy market that supports the ruble, notes "The Economist".

But most other European cities are slipping in the rankings as the energy crisis and weakening economies have weighed on the euro and local currencies. In France, Paris fell four places to ninth position, while Lyon fell 34 places to 90th.

Not surprisingly, the fastest price increases were for gasoline (as in 2021), which rose 22% in local currency terms in the wake of crude oil prices. But the surge in electricity, food, and basic household items has also played a role.

On the other hand, leisure prices remained subdued. This "may reflect weaker demand, as consumers focus their spending on essential goods," says The Economist, based on a survey conducted between August 16 and September 16.