World / Which are world's most expensive cities to live in during COVID-19 pandemic?

Cologny: Hong Kong, Zurich and Paris have topped a new list of the most expensive cities.

Zurich and Paris overtook Singapore and Osaka.

A weaker dollar has sparked a relative fall in costs in the Americas.

The COVID-19 pandemic has reshaped demand for and prices of many items.

Prices for consumer electronics have surged, while clothing prices have fallen.

Tobacco and recreation saw the biggest price increases since last year.

It’s predicted that price-conscious consumers will prioritize spending on staple items in 2021.

How much money we spend and on what is being extensively reshaped by the coronavirus pandemic.

That’s the conclusion of an annual index on the world’s most expensive cities, that saw Zurich and Paris displace Singapore and Osaka to join Hong Kong as the three priciest locations on the planet.

Cities in the Americas, Africa and Eastern Europe became less costly over the year, while those in Westerm Europe became relatively more expensive, in part reflecting a rise in European currencies against the US dollar. Upasana Dutt, who oversees the Worldwide Cost of Living report at The Economist Intelligence Unit, says some of the currency weakness was because the survey took place in September, when the Americas were suffering acutely from the pandemic.

Among 10 categories, tobacco and recreation – which includes consumer electronics – rose the most, while clothing costs fell.

“COVID-19 has had an impact on the way goods and services are used,” Dutt told a Zoom session to discuss the contents of the report. “Consumer electronics have seen the highest price increases since last year,” and this is not surprising given how much home working pushed up demand for laptops, she said.

The pandemic’s effects on the 2020 survey include: supply-chain problems, with shortages of items like toilet roll fuelling some price increases; government actions, with the imposition of some price controls or tax increases; falling disposable incomes; and changes in lifestyles – for example people spending more time at home.

The changes highlighted by the survey provide another glimpse into how far reaching the consequences of the crisis are likely to be. And there’s probably more to come, with the economic recovery likely to be “partial and uneven,” according to the International Monetary Fund, which also predicts that COVID-19 will increase inequality in emerging markets and developing economies.