The Economist Intelligence Unit, a division of the Economist Magazine, has released it’s annual survey that ranks the top 130 cities in the world by cost of living, and for 2005 Oslo was the most expensive and surprise, surprise, Tehran was the least expensive city to do business in. New York City was the most expensive city in the United States coming in at 27th position.
Latin America saw inflation hit their currencies and moved up the list while the United States saw a modest increase and most of it’s cities moved down the charts.
The 10 Most Expensive Cities in the World
1 Oslo, Norway
2 Tokyo, Japan
3 Reykjavik, Iceland
4 Osaka Kobe, Japan
4 Paris, France
6 Copenhagen, Denmark
7 London, UK
8 Zurich, Switzerland
9 Geneva, Switzerland
10 Helsinki, Finland
The Economist goes on further to explain how the cost of living is determined:
There are two major reasons why a city’s cost of living index will change over time: exchange rate movement and price movement. Since a common currency is required in making a comparative calculation all local prices are converted into dollars, which emphasises the role of currency movement. If, for example, a currency strengthens or inflation pushes the price of goods up, so the relative cost of living in that country will also rise.