…By Judah Olanisebee for TDPel Media.
New York City has surpassed Hong Kong as the world’s most expensive city for expats, according to rankings by ECA International.
This change in ranking is attributed to months of soaring inflation and above-average rent hikes, which have significantly increased the cost of living in the Big Apple.
Hong Kong, last year’s top-ranking city, slipped into second place, while Geneva, Switzerland, maintained its position in third.
London remained in fourth place, and Singapore climbed to fifth after jumping from 13th place in 2022.
Other US cities that made it into the top 20 included San Francisco at seventh, Los Angeles at 15th, and Chicago at 20th.
The study conducted by ECA International focused on expenses for expatriates, taking into account rent costs and the prices of commonly purchased consumer goods, including food.
According to the report, food prices globally have risen by an average of around 15 percent in the past year, more than twice the rate of the previous year.
In the US, food prices have increased by 10 percent since the 2022 report. Although inflation has slowed in recent months, it remains higher than the Federal Reserve’s target of 2 percent.
While the prices of certain groceries have significantly risen, fuel, gadgets, and appliances have shown resistance to this trend.
The rising costs of living have particularly impacted Europe, with two-thirds of Eurozone countries climbing up the rankings.
Apart from London, other UK cities in the study experienced drops in the rankings.
The weakness of the pound contributed to the country becoming more affordable for people coming from other countries, but rising costs driven by food, utilities, and housing prices continue to pose challenges.
The ECA report also highlights the impact of the war in Ukraine following Russia’s invasion in February 2022.
The conflict has affected the cost of living in the warring countries, the wider region, and even globally.
Despite Western sanctions, the Russian ruble has rebounded, causing Moscow to rise 37 places and become the 25th most expensive location in the world.
In the coming weeks, the US government will release its latest monthly updates on inflation, and the Federal Reserve will meet to discuss interest-rate policy.
Speculation on Wall Street suggests that the Fed may delay rate hikes, which would be the first time in over a year, but could potentially resume raising rates in July.
Investors are closely monitoring whether a recession or a significant drop in inflation will prompt the Fed to begin cutting interest rates, as the high rates have already impacted various sectors of the economy.
US Treasury Secretary Janet Yellen expressed confidence in the strength of the national economy, citing robust consumer spending.
Yellen also mentioned the significance of legislation to increase the debt ceiling and reduce US deficits, which would support the Federal Reserve’s efforts to combat inflation.
While acknowledging potential challenges, Yellen believes that banks should be able to handle the strain given the overall level of capital and liquidity in the banking system.