Budapest, Belgrade, Bucharest: The Least Expensive Cities in Eastern Europe—New Global Ranking of Economist Intelligence Unit

Worldwide Cost of Living, the biannual Economist Intelligence Unit survey, compares prices and products in more than 130 cities around the world. Surveys are carried out in March and October each year. The survey’s purpose is to provide companies with an unbiased and independent guide for calculating allowances for executives and their families being sent overseas. The Economist Intelligence Unit can calculate indexes based on any one of the cities. The data quoted here used New York as a base index of 100 for comparison purposes.

The survey’s main findings are as follows:

• The capitals of some of the transition economies, Bucharest, Belgrade, Budapest, and Prague, are the cheapest cities in Europe.

• China: Accession to the WTO and cheaper imports have meant that the cost of living in China has fallen over the past 12 months, a trend that is likely to continue.

• The Americas: New York (ranked 7th) and Chicago (10th) remain the most expensive cities in North America. Calgary (82nd) is the cheapest in North America, while Atlanta (63rd) is the cheapest in the United States. Following the economic crisis in Argentina and the collapse of the peso, Buenos Aires (120th) has dropped from Latin America’s most expensive city to its second cheapest in the space of 12 months. Rio de Janeiro and Sao Paulo are both comparatively cheap holiday destinations.

• Africa: For the first time two African cities are in the top 10. With inflation of more than 100 percent, shortages of goods on the shelves, and a government doggedly holding on to an overvalued exchange rate peg, Harare has risen from 120th a year ago to 4th this time around, joining the perennially expensive Libreville (6th). The South African cities of Johannes-burg and Pretoria (both 129th) remain Africa’s (and some of the world’s) cheapest

• Asia: The Japanese cities of Tokyo and Osaka remain at the top, although the gap between them and third-placed Hong Kong (China) has narrowed. While the most expensive cities are located in Asia, the region is also home to some of the cheapest. New Delhi (133rd) is the second cheapest, with a cost of living less than a third of Tokyo’s. Although the Australian cities have risen in the rankings, their cost of living indexes have remained relatively static, while the indexes of similarly ranked cities have fallen.

A city’s cost of living index will change over time for two main reasons: exchange rate movement and price movement. If, for example, a currency strengthens or inflation pushes up the price of goods, then the relative cost of living in that country will also rise.

Worldwide Cost of Living is now available from the Economist Intelligence Unit online at http://wcol.eiu.com, by telephone on 44-20-7830-1007, or by email at london@eiu.com. For more detailed information on the survey please contact Bill Ridgers on 44-20–7830-1118. For more information on the Economist Intelligence Unit, go to www.eiu.com. 

Worldwide Cost of Living, Selected Cities, June 2002

Rank

City

Index

Rank 12 months ago

1

Tokyo

129

1

2

Osaka Kobe

127

1

3

Hong Kong (China)

115

3

13

Beijing

  94

  12

18

Shanghai

  91

  17

26

Guangzhou

  87

  19

35

Moscow

  83

  34

36

Dalian

  83

  31

43

Shenzhen

  81

  27

50

Tianjin

  77

  45 

75

Ho Chi Minh

  68

  77

80

St. Petersburg

  67

  89

83

Kiev

  65

  85

86

Baku

  64

  98

87

Warsaw

  64

  89

88

Hanoi

  64

  85

97

Zagreb

  62

  98

106

Prague

  59

108

109

Phnom Penh

  56

115

116

Tashkent

  54

102

118

Budapest

  51

121

121

Belgrade

  45

130

123

Bucharest

  44

124

129

Johannesburg

  38

122

130 

Pretoria

  38

122

131

Tehran 

  30

131