Hong Kong drops to fifth in expensive city rankings

Hong Kong has been ranked the fifth most expensive city in the world – down from it’s top position last year.

According to data by the Economist Intelligence Unit’s World Cost of Living Index, the SAR was knocked off the top spot by Tel Aviv – which was ranked fifth in the index last year – followed by Paris and Singapore in joint second, and Zurich in fourth.

Last year, Hong Kong shared the crown for most expensive city with Paris and Zurich.

The other cities in the top 10 were New York, Geneva, Copenhagen, Los Angeles, and Osaka.

The EIU said the inflation rate of 3.5 percent tracked in the index is the highest recorded over the past five years.

It also said supply chain problems, exchange rate shifts, and changing consumer demand had led to rising prices for commodities and other goods.

The index said that the most rapid price increases in the index were for transport, with the cost of a litre of petrol up by 21 percent on average.

Upasana Dutt, Head of Worldwide Cost of Living at EIU, attributed the reshuffle in the rankings to disruption in the global supply chain.

“Over the coming year, we expect to see the cost of living rise further in many cities as wages increase in many sectors. However, we are also expecting central banks to raise interest rates, cautiously, to stem inflation. So the price increases should start to moderate from this year’s level,” she said.