A study by The Economist has ranked Tel Aviv as the world’s most expensive city for the first time in the history of its ranking, exceeding Paris. Paris and Singapore tied for second place.
Previously, Tel Aviv ranked fifth in the EIU’s Worldwide Cost of Living Index. The jump to first was primarily due to the increased strength of the shekel and the attendant rise in prices — the fastest inflation rate recorded in the past five years worldwide.
The city with the biggest jump was Tehran, Iran. Its ranking moved from 79 to 29, following changes in sanctions from the US under President Joe Biden.
In last place among the 173 cities included was Damascus, Syria. The Syrian capital continues to struggle following years of civil war.
The rise in oil prices has also led to many changes across the board, up 21 percent among the cities in the study. In fact, the four cities experiencing the highest inflation all have been strongly impacted by rising oil prices: Caracas, Damascus, Buenos Aires, and Tehran.
Several observations can be made based upon the new rankings. First, Tel Aviv continues its climb, both as a global city of impact and now as the world’s most expensive city. Israel can build upon the successes of the city, but will need to find ways to lower costs when possible, especially housing costs, to keep the city moving forward.
Second, the price of oil has a tremendous range of impact on today’s top cities. The security and production of oil will remain vital in the near future. However, fossil fuel alternatives will need to continue to grow to help reduce dependence upon traditional oil sources.
Third, policy changes regarding Iran have changed the city’s economic level dramatically. While the Biden administration is seeking ways to create leverage to stop Iran’s nuclear weapon development through diplomatic means, the current efforts appear to do the opposite, improving the nation’s economy with no noticeable change in the nation’s nuclear policies.