Tel Aviv is the most expensive city in the world according to the latest ‘worldwide cost of living’ report released by The Economist on 1 December.
The report examined prices of goods and services in 173 countries. Tied for the second most expensive city in the world are Paris and Singapore.
Tel Aviv is known for its high real estate prices which makes it impossible for average income households to buy an apartment. Tourists complain about high hotel prices and expensive beer and wine at restaurants and bars.
However, inflation in Israel is lower than in other countries. According to Israeli newspaper Haaretz, Economist’s figures can be misleading and do not tell the whole picture.
The Economist compared prices in dollars based on currency exchange rates and an average basket of goods consumed by households in 2018. The Israeli shekel is strong and has in fact become even stronger compared to the dollar and euro during the coronavirus crisis thanks to the country’s high-tech export.
That’s means that prices have increased when calculated in dollars and Tel Aviv has become more expensive for visiting tourists if they were to be allowed to enter the country during the Omicron emergency. This however is a small comfort for Israelis who have to pay much more for basic goods than consumers in the EU because of vested interests and custom fees on imported goods.
Over the coming year, we expect to see the cost of living rise further in many cities as wages increase in many sectors, Upasana Dutt, head of worldwide cost of living at the Economist Intelligence Unit, said in a press release.