Statistics
Zurich, Geneva Climb Up World Price Rankings As Forex Values Shift – UBS Study
Zurich, Geneva and New York City are the most expensive cities in the world, according to new research.
Expenses shot up in Swiss cities amid a stronger currency, while London's earnings are not as high as you would expect from its price levels, according to the UBS Prices and Earnings study.
Zurich and Geneva rose to the top in both price and wage levels following the Swiss National Bank's removal of the SFr1.20 ($1.25) per euro floor in January, which led to a sharp appreciation of the Swiss franc.
“Similarly, the euro had lost almost one-quarter of its value against the US dollar from mid-2014 until the end of the first quarter of 2015, which caused eurozone cities to plunge in our price and wage-level rankings,” UBS said.
London came out as the sixth most expensive city, excluding rent, and the fifth priciest including rent, according to the study, which examines prices, wages and earners' purchasing power in 71 cities worldwide. However, the city only earns the 13th highest ranking worldwide.
Salaries go farthest in Luxembourg, Zurich and Geneva, where wages are the highest. On the other end of the spectrum, Nairobi and Jakarta have the lowest purchasing power, with workers there able to afford just one-tenth of those in Luxembourg.
In Asia, the Japanese yen lost value. UBS said Japan has yet to experience the growth promised by Abenomics, the economic policies advocated by Prime Minister ShinzĹŤ Abe to spur sustained growth, though inflation has risen from 0 per cent in 2012 to 2.7 per cent last year. The country was overtaken by South Korea, where the won strengthened over 6 per cent against the US dollar since 2012, with inflation falling from 2.2 per cent in 2012 to 1.3 per cent in 2014.
Meanwhile, economic and political instability in South America affected exchange rates and certain countries there dipped in the rankings. The Brazilian real depreciated almost 35 per cent against the dollar since 2012 due to continuously declining foreign trade, resulting in official inflation figures of over 6 per cent last year, UBS said, and Argentina and Colombia faced similar fates.
In other findings, income tax takes the biggest bite in Copenhagen where the average tax is around 45 per cent, compared to the global average of 13 per cent.
