Tokyo (SCCIJ) – The cost of living in Japan’s two largest metropolises has come down, at least comparatively. The Japanese capital is not even in the Top Ten of the latest biannual Worldwide Cost of Living Report produced by the Economist Intelligence Unit anymore. Thus, in comparison to other countries, life in Japan has become more affordable for expatriates from Switzerland. At the same time, the two Swiss cities Geneva and Zurich have risen in the new ranking. But this may be misleading because the ranking is the result of a comparison.
Prices of 160 products and services
According to the Worldwide Cost of Living report, the two Japanese metropolises Tokyo and Osaka rank eleventh among 133 cities. The Japanese capital, which was the world’s most expensive city in 2013, has moved seven places down the ranking in the past twelve months. Since 2014, the top spot has been occupied by Singapore. Zurich went up from third to second place and now ranks equal with Paris. Geneva rose from seventh to sixth place in the ranking.
View of Lake of Geneva
The Worldwide Cost of Living is a biannual Economist Intelligence Unit survey that compares more than 400 individual prices across 160 products and services. These include food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs. The survey allows for city-to-city comparisons, but for the purpose of the ranking all cities are compared with a base city of New York, which has an index set at 100.
Lower inflation, weakened currency
According to the Economist Intelligence Unit, the changes in the rankings primarily reflect price and currency developments. In Japan, this had a double effect: Prices have hardly risen for years. At the same time, the Japanese currency weakened sharply due to the expansionary monetary policy. The same happened with US cities: Due to the weak dollar and low inflation, New York fell from ninth to thirteenth and Los Angeles from eleventh to fourteenth place.
Switzerland’s currency also weakened and its inflation rate remains low. But the cost of living in other major cities in the top ten went down even further. Thus, their higher rankings do not mean that the cost of living has gone up in Switzerland. In fact, the ranking results from a comparison with the cost of living in New York. In this respect and compared to the previous survey, life in Zurich and Geneva became even a little bit cheaper.
Asia and Nordics dominate top ten
Singapore has been continuously ranked the most expensive city in the world, mainly because of the high cost of vehicle ownership and clothing. But household goods and maids are comparatively cheap there. Seoul at #6 is the only other city in the top ten that has maintained its rank from the previous year. In the rest of Asia-Pacific, Hong Kong (#4) and Sydney (#10) join Singapore and Seoul in the top ten.
Despite the appreciation of the euro, Paris is the city from a European Monetary Union country in the top ten. The French capital jumped from seventh to second place. Only alcohol, cigarettes and transport are comparatively cheap in Paris, the Economist Intelligence Unit said. Within Western Europe it is non-euro area cities that largely remain the most expensive, with Oslo at fifth and Copenhagen at eighth place.
The free version of the report can be downloaded here (after registration). Please note that only the paid version contains the complete ranking list.
Text: SCCIJ partly with material of The Economist; Photo: Lake of Geneva (Pixabay/luisfpizarro CC0)
