Working time

City

City

1 Big Mac
 in min.

1 Big Mac
 in min.

City

Hong Kong

1 Big Mac
 in min.

9

City

Luxembourg

1 Big Mac
 in min.

10

City

Tokyo

1 Big Mac
 in min.

10

City

Zurich

1 Big Mac
 in min.

11

City

Miami

1 Big Mac
 in min.

11

City

Geneva

1 Big Mac
 in min.

11

City

Sydney

1 Big Mac
 in min.

11

City

Los Angeles

1 Big Mac
 in min.

11

City

Nicosia

1 Big Mac
 in min.

11

City

Chicago

1 Big Mac
 in min.

11

City

New York City

1 Big Mac
 in min.

11

City

Vienna

1 Big Mac
 in min.

12

City

London

1 Big Mac
 in min.

12

City

Munich

1 Big Mac
 in min.

13

City

Auckland

1 Big Mac
 in min.

13

City

Frankfurt

1 Big Mac
 in min.

13

City

Montreal

1 Big Mac
 in min.

13

City

Taipei

1 Big Mac
 in min.

13

City

Berlin

1 Big Mac
 in min.

13

City

Ljubljana

1 Big Mac
 in min.

15

City

Dublin

1 Big Mac
 in min.

15

City

Paris

1 Big Mac
 in min.

15

City

Toronto

1 Big Mac
 in min.

15

City

Brussels

1 Big Mac
 in min.

16

City

Amsterdam

1 Big Mac
 in min.

16

City

Helsinki

1 Big Mac
 in min.

16

City

Lyon

1 Big Mac
 in min.

16

City

Stockholm

1 Big Mac
 in min.

17

City

Johannesburg

1 Big Mac
 in min.

17

City

Dubai

1 Big Mac
 in min.

17

City

Seoul

1 Big Mac
 in min.

18

City

Rome

1 Big Mac
 in min.

18

City

Doha

1 Big Mac
 in min.

18

City

Milan

1 Big Mac
 in min.

18

City

Oslo

1 Big Mac
 in min.

19

City

Madrid

1 Big Mac
 in min.

19

City

Copenhagen

1 Big Mac
 in min.

20

City

Manama

1 Big Mac
 in min.

20

City

Moscow

1 Big Mac
 in min.

20

City

Barcelona

1 Big Mac
 in min.

21

City

Tel Aviv

1 Big Mac
 in min.

21

City

Lisbon

1 Big Mac
 in min.

22

City

Kuala Lumpur

1 Big Mac
 in min.

23

City

Bratislava

1 Big Mac
 in min.

24

City

Sao Paulo

1 Big Mac
 in min.

25

City

Warsaw

1 Big Mac
 in min.

25

City

Athens

1 Big Mac
 in min.

26

City

Buenos Aires

1 Big Mac
 in min.

29

City

Tallinn

1 Big Mac
 in min.

29

City

Vilnius

1 Big Mac
 in min.

29

City

Prague

1 Big Mac
 in min.

30

City

Santiago de Chile

1 Big Mac
 in min.

32

City

Rio de Janeiro

1 Big Mac
 in min.

32

City

Riga

1 Big Mac
 in min.

34

City

Istanbul

1 Big Mac
 in min.

34

City

Bogotá

1 Big Mac
 in min.

35

City

Shanghai

1 Big Mac
 in min.

35

City

Bangkok

1 Big Mac
 in min.

37

City

Lima

1 Big Mac
 in min.

38

City

Mumbai

1 Big Mac
 in min.

40

City

Sofia

1 Big Mac
 in min.

40

City

Beijing

1 Big Mac
 in min.

42

City

Budapest

1 Big Mac
 in min.

44

City

Bucharest

1 Big Mac
 in min.

44

City

New Delhi

1 Big Mac
 in min.

50

City

Kiev

1 Big Mac
 in min.

55

City

Cairo

1 Big Mac
 in min.

62

City

Jakarta

1 Big Mac
 in min.

67

City

Mexico City

1 Big Mac
 in min.

78

City

Manila

1 Big Mac
 in min.

87

City

Nairobi

1 Big Mac
 in min.

173

Working time required to buy: Who works harder to buy a Big Mac?

Some consumer goods are available all over the globe. We decided to feature four in our section that calculates how much time an average worker in each city must work to earn enough to purchase each one. As staple consumer goods, the McDonald’s Big Mac and the Apple iPhone will be the same quality and nature whether bought in Doha or Rio de Janeiro. This makes their worldwide prices and affordability comparable. Workers in Hong Kong only have to work on average nine minutes to be able to buy a Big Mac, while workers in Nairobi have to work almost three hours.

The distribution of city rankings changes according to the reference goods being bought. Oslo, in the lower half of the table for buying bread, jumps to the top for rice. Workers there can afford it in one-eighteenth of the time that their counterparts in New Delhi require. For the iPhone, workers in cities such as Zurich and New York City require on average less than three days on the job to be able to grab one. In contrast, workers in Kiev must labor, on average, over 13 weeks to earn enough for the same phone. Workers in Buenos Aires cannot access official markets to purchase the iPhone 6 locally.

Methodology

Prices of each product were an average from all survey participants and, where possible, were compared to the manufacturers’ official local retail price. The price of each product was then divided by the net hourly wage for our 15 professions and converted to either minutes or hours.

Prices

City

City

Incl. rent*

Incl. rent*

City

New York City

Incl. rent*

100.0

City

Zurich

Incl. rent*

92.6

City

Geneva

Incl. rent*

91.8

City

Oslo

Incl. rent*

79.9

City

London

Incl. rent*

79.5

City

Hong Kong

Incl. rent*

76.8

City

Chicago

Incl. rent*

76.7

City

Copenhagen

Incl. rent*

74.3

City

Sydney

Incl. rent*

72.5

City

Tokyo

Incl. rent*

70.6

City

Miami

Incl. rent*

67.7

City

Auckland

Incl. rent*

67.6

City

Los Angeles

Incl. rent*

67.4

City

Luxembourg

Incl. rent*

66.1

City

Dubai

Incl. rent*

66.1

City

Milan

Incl. rent*

64.5

City

Seoul

Incl. rent*

64.2

City

Paris

Incl. rent*

63.8

City

Toronto

Incl. rent*

63.7

City

Helsinki

Incl. rent*

63.2

City

Dublin

Incl. rent*

63.1

City

Stockholm

Incl. rent*

62.8

City

Taipei

Incl. rent*

62.7

City

Tel Aviv

Incl. rent*

61.4

City

Doha

Incl. rent*

61.4

City

Montreal

Incl. rent*

58.9

City

Brussels

Incl. rent*

57.3

City

Rome

Incl. rent*

57.1

City

Buenos Aires

Incl. rent*

56.1

City

Munich

Incl. rent*

56.1

City

Amsterdam

Incl. rent*

55.5

City

Manama

Incl. rent*

55.4

City

Frankfurt

Incl. rent*

55.1

City

Shanghai

Incl. rent*

54.3

City

Vienna

Incl. rent*

53.4

City

Beijing

Incl. rent*

53.2

City

Istanbul

Incl. rent*

53.0

City

Berlin

Incl. rent*

51.3

City

Lyon

Incl. rent*

51.2

City

Barcelona

Incl. rent*

50.5

City

Madrid

Incl. rent*

50.4

City

Sao Paulo

Incl. rent*

49.5

City

Rio de Janeiro

Incl. rent*

49.2

City

Nicosia

Incl. rent*

48.4

City

Athens

Incl. rent*

47.5

City

Bangkok

Incl. rent*

46.4

City

Mexico City

Incl. rent*

46.2

City

Lisbon

Incl. rent*

45.3

City

Moscow

Incl. rent*

45.2

City

Santiago de Chile

Incl. rent*

44.0

City

Tallinn

Incl. rent*

44.0

City

Ljubljana

Incl. rent*

44.0

City

Bogotá

Incl. rent*

43.7

City

Lima

Incl. rent*

42.8

City

Bratislava

Incl. rent*

42.6

City

Jakarta

Incl. rent*

41.6

City

Kuala Lumpur

Incl. rent*

41.2

City

Manila

Incl. rent*

41.1

City

Vilnius

Incl. rent*

40.9

City

Johannesburg

Incl. rent*

40.5

City

Nairobi

Incl. rent*

40.5

City

Warsaw

Incl. rent*

39.6

City

Cairo

Incl. rent*

38.7

City

Budapest

Incl. rent*

38.6

City

Mumbai

Incl. rent*

37.2

City

Riga

Incl. rent*

37.1

City

New Delhi

Incl. rent*

36.9

City

Prague

Incl. rent*

36.4

City

Bucharest

Incl. rent*

34.5

City

Kiev

Incl. rent*

30.3

City

Sofia

Incl. rent*

30.0

Price levels: Do I live in an expensive city?

The price level rankings reveal the relative cost of goods and services worldwide. Zurich, Geneva, and New York City have the highest prices, over 2.5 times higher than those in Bucharest, Sofia, and Kiev, with the lowest. Istanbul, Doha, and Lyon are middle-ranking cities; prices there are somewhat closer to those of high-ranking cities than to those of lower ranked ones.

When rents are included in the price level index, almost all city indices decrease in relation to New York City, with an average decrease of 17%. Hong Kong is the only exception, gaining over 5% due to high rents, and moving up 13 spots in our ranking. Rents also make New York City the most expensive city, and Sofia the least expensive. Price levels including rents show how large an impact rents have on monthly spending. Assuming similar incomes, residents of Hong Kong must allocate almost 8% more of their income to housing than those in New York City. By comparison, residents in Zurich spend almost 8% less on rent than New York City residents.

Methodology

The composition of our reference basket of goods and services represents the spending habits of a three-person European family. The prices of the 122 goods and services are weighted by monthly consumption. For example, we assume that a family in Europe consumes almost 15 kilos (33 pounds) of vegetables every month, but only buys a new personal computer every 2.5 years. Price level calculations are based on the cost of a basket of 122 goods and services including rent. For our index, these reference basket prices are shown as relative to our reference city, New York City. Rent values were calculated by weighting the prices of our three types of housing equally.

Wages

City

City

Net*

Net*

City

Zurich

Net*

141.8

City

Geneva

Net*

135.2

City

Luxembourg

Net*

97.1

City

New York City

Net*

100.0

City

Miami

Net*

92.9

City

Copenhagen

Net*

56.8

City

Sydney

Net*

83.9

City

Oslo

Net*

80.4

City

Los Angeles

Net*

88.2

City

Chicago

Net*

84.5

City

Montreal

Net*

78.2

City

Stockholm

Net*

63.7

City

London

Net*

72.3

City

Brussels

Net*

61.1

City

Toronto

Net*

69.5

City

Tokyo

Net*

66.5

City

Auckland

Net*

68.6

City

Dublin

Net*

64.3

City

Vienna

Net*

69.7

City

Helsinki

Net*

62.8

City

Munich

Net*

68.2

City

Frankfurt

Net*

67.1

City

Amsterdam

Net*

53.3

City

Berlin

Net*

64.5

City

Paris

Net*

67.1

City

Rome

Net*

54.2

City

Nicosia

Net*

64.4

City

Milan

Net*

53.1

City

Lyon

Net*

62.8

City

Barcelona

Net*

46.8

City

Madrid

Net*

46.2

City

Hong Kong

Net*

51.3

City

Tel Aviv

Net*

47.3

City

Seoul

Net*

50.2

City

Manama

Net*

53.1

City

Dubai

Net*

46.9

City

Taipei

Net*

38.8

City

Sao Paulo

Net*

38.8

City

Ljubljana

Net*

32.7

City

Johannesburg

Net*

30.7

City

Doha

Net*

37.4

City

Lisbon

Net*

32.0

City

Athens

Net*

28.2

City

Bratislava

Net*

27.6

City

Rio de Janeiro

Net*

30.3

City

Istanbul

Net*

26.0

City

Tallinn

Net*

24.2

City

Warsaw

Net*

22.4

City

Santiago de Chile

Net*

25.1

City

Buenos Aires

Net*

26.3

City

Vilnius

Net*

21.2

City

Moscow

Net*

21.5

City

Prague

Net*

20.3

City

Riga

Net*

17.1

City

Shanghai

Net*

19.2

City

Kuala Lumpur

Net*

20.2

City

Bogota

Net*

20.3

City

Bangkok

Net*

18.9

City

Lima

Net*

18.9

City

Budapest

Net*

16.0

City

Bucharest

Net*

14.2

City

Beijing

Net*

14.5

City

Mexico City

Net*

13.0

City

Sofia

Net*

12.1

City

Manila

Net*

9.2

City

Mumbai

Net*

9.1

City

Cairo

Net*

8.8

City

New Delhi

Net*

8.5

City

Nairobi

Net*

6.5

City

Jakarta

Net*

6.8

City

Kiev

Net*

6.1

Wage levels: Would I earn more in another city?

Wage levels indicate earnings worldwide. Workers in cities with high relative gross salaries (Zurich, Geneva and Luxembourg) receive pay that is on average 19 times those in Nairobi, Jakarta and Kiev. Cities such as Tel Aviv, Barcelona and Seoul ended up in the middle of our rankings. Their workers receive nominal gross salaries a little under onehalf of those living in the highest-ranking cities, but seven times those from the lowest-ranking cities.

Net wages take into account deductions, and will usually shift all cities down in rankings compared to New York City. Relatively high deductions, stemming from significant social security contributions and taxes, are seen in Copenhagen, Brussels and Milan. If one considers net instead of gross wages, wage-level ranking drops an average of 22%. Then there are cities, such as Manama, Doha and Dubai, whose net-wage index rises by an average of 16% due to comparatively lower deductions. Net wages are a good indication of expendable income: a worker in Zurich will have almost 23 times the amount of money to spend than a similar worker in Kiev.

Methodology

Gross hourly wages are calculated from the survey’s gross annual earnings data divided by the annual number of working hours. Net hourly earnings are calculated by removing taxes, social security and other special deductions from gross annual income for each city, and dividing it by annual working hours. Hourly wages are weighted according to the distribution of our 15 professions. 

Purchasing Power

City

City

Net annual income*

Net annual income*

City

Zurich

Net annual income*

135.1

City

Geneva

Net annual income*

128.3

City

Luxembourg

Net annual income*

123.8

City

Miami

Net annual income*

122.6

City

Los Angeles

Net annual income*

121.1

City

Chicago

Net annual income*

111.2

City

Nicosia

Net annual income*

107.2

City

Sydney

Net annual income*

103.2

City

New York City

Net annual income*

100.0

City

Hong Kong

Net annual income*

99.3

City

Montreal

Net annual income*

99.1

City

Berlin

Net annual income*

97.6

City

Munich

Net annual income*

97.1

City

Frankfurt

Net annual income*

97.0

City

Vienna

Net annual income*

96.8

City

Toronto

Net annual income*

95.7

City

Manama

Net annual income*

89.5

City

Auckland

Net annual income*

89.4

City

Tokyo

Net annual income*

89.0

City

Dublin

Net annual income*

87.6

City

Lyon

Net annual income*

85.5

City

Brussels

Net annual income*

84.5

City

Oslo

Net annual income*

81.7

City

London

Net annual income*

80.4

City

Paris

Net annual income*

80.2

City

Stockholm

Net annual income*

79.4

City

Dubai

Net annual income*

78.0

City

Amsterdam

Net annual income*

76.3

City

Rome

Net annual income*

76.0

City

Helsinki

Net annual income*

75.9

City

Tel Aviv

Net annual income*

72.6

City

Madrid

Net annual income*

71.4

City

Barcelona

Net annual income*

69.4

City

Taipei

Net annual income*

66.7

City

Seoul

Net annual income*

66.4

City

Johannesburg

Net annual income*

66.0

City

Doha

Net annual income*

65.1

City

Sao Paulo

Net annual income*

64.4

City

Milan

Net annual income*

62.4

City

Ljubljana

Net annual income*

60.8

City

Copenhagen

Net annual income*

59.3

City

Lisbon

Net annual income*

54.5

City

Santiago de Chile

Net annual income*

53.6

City

Bratislava

Net annual income*

51.7

City

Rio de Janeiro

Net annual income*

49.4

City

Athens

Net annual income*

46.6

City

Istanbul

Net annual income*

44.3

City

Warsaw

Net annual income*

43.7

City

Bogotá

Net annual income*

42.9

City

Prague

Net annual income*

42.3

City

Tallinn

Net annual income*

41.8

City

Kuala Lumpur

Net annual income*

40.7

City

Bangkok

Net annual income*

39.0

City

Vilnius

Net annual income*

38.7

City

Lima

Net annual income*

38.4

City

Buenos Aires

Net annual income*

38.4

City

Moscow

Net annual income*

36.9

City

Riga

Net annual income*

36.8

City

Budapest

Net annual income*

34.7

City

Shanghai

Net annual income*

32.9

City

Bucharest

Net annual income*

31.6

City

Sofia

Net annual income*

30.5

City

Mexico City

Net annual income*

29.1

City

Mumbai

Net annual income*

25.0

City

Beijing

Net annual income*

25.0

City

New Delhi

Net annual income*

22.3

City

Cairo

Net annual income*

20.7

City

Manila

Net annual income*

18.9

City

Kiev

Net annual income*

15.8

City

Nairobi

Net annual income*

15.2

City

Jakarta

Net annual income*

14.6

Domestic purchasing power: What are my wages actually worth?

Taken separately, price and earnings data has proven interesting to interpret, but, when compared, such data enables us to reach conclusions about worldwide purchasing power. If one takes net hourly pay as the benchmark, earners in Luxembourg have the highest purchasing power, more than 10 times greater than for earners in Jakarta, the city exhibiting the lowest purchasing power of all surveyed cities in 2015.

Our basket of goods represents the monthly consumption of a three-person family in Europe. The residents of major cities in Switzerland and the USA can afford 20 and 18 baskets per year respectively, while those of Western European cities such as London, Lyon and Oslo can buy a basket every month. Our basket becomes a challenge for the inhabitants of cities in Asia and Africa (who can afford only a basket every four months, on average). This can be partly explained by differing consumption habits, but it also indicates that families in some cities need supplementary incomes to support a European standard of life.

Methodology

To calculate the first two parts of the purchasing power indicator, we divided gross and net hourly wages for each city by the respective cost of our basket of goods, excluding rent, and indexed relative to New York City. The third part is calculated as an indexed ranking based on how many baskets a worker can purchase annually. We divided net annual income for each city by the cost of the basket (excluding rent). This indicator is sorted by the indexed purchasing power of net hourly wages. Rent prices were excluded, as their variability among the housing choices presented in our survey may lead to different rankings of cities in combined price and earnings indicators.

Methodology

Methodology

Between the end of March and end of April 2015, we completed a standardized survey on prices of 122 goods and services, and earnings for 15 professions in 71 cities worldwide. The survey was conducted locally by mutually independent observers. More than 68,000 data points were collected and included in our calculations of the indicators in this report.

To effectively compare cities, we converted all prices and earnings in local currencies to a common currency, the US dollar (USD). Average exchange rates from the data collection period were used to minimize the effect of daily price fluctuations.

While we originally started the survey with 72 cities, we needed to remove Caracas, Venezuela. Due to the current complex political and economic situation in the country, with large fluctuations in inflation and exchange rates, we decided that the results for it would not represent current circumstances.


Reference basket of goods

To make an effective comparison of purchasing power worldwide, a standardized basket of goods and services is required, even though consumer habits and preferences vary greatly. Our reference basket of 122 goods and services is based on the monthly consumption habits of a European three-person family. If products were not available in some cities, or deviated too far from our parameters, local representative substitutes were sometimes used. To make up for the missing coverage, individual items were weighted differently as a correction. We attained a coverage level of almost 70% of the EU’s harmonized index of consumer prices (HCIP) this year.

Changes in consumer habits stemming from technological developments were accounted for by updated specifications for electronic products. The iPhone 4S from 2012, for instance, was replaced with an iPhone 6. We also expanded data collection possibilities for our housing section to get a more accurate picture of local accommodation worldwide. Also, the furnished four-room apartment was changed to a furnished two-room apartment.

Reference profile of working populations

As with our prices section, we created a reference profile of 15 professions, representing the structure of the working population in Europe. We included profiles of workers of varying ages, family status, work experience and education levels. To offer a fuller picture, we introduced the profession of a hospital nurse to replace the financial analyst. This change affected our weighting of the other professions, a fact to consider when comparing this version of the report to those of previous years. We also expanded our social security contributions section considerably to encapsulate both employee and employer contributions, providing a more realistic cost of the global workforce.

Exchange rates & inflation

City

City

2012*

2012*

2013*

2013*

2014*

2014*

 

 

City

Amsterdam

2012*

2.5

2013*

2.5

2014*

1.0

 

 

City

Athens

2012*

1.5

2013*

-0.9

2014*

-1.3

 

 

City

Auckland

2012*

0.9

2013*

1.3

2014*

0.8

 

 

City

Bangkok

2012*

3.0

2013*

2.2

2014*

1.9

 

 

City

Barcelona

2012*

2.4

2013*

1.4

2014*

-0.1

 

 

City

Beijing

2012*

2.7

2013*

2.6

2014*

2.0

 

 

City

Berlin

2012*

2.0

2013*

1.5

2014*

0.9

 

 

City

Bogotá

2012*

3.2

2013*

2.0

2014*

2.9

 

 

City

Bratislava

2012*

3.6

2013*

1.4

2014*

-0.1

 

 

City

Brussels

2012*

2.8

2013*

1.1

2014*

0.3

 

 

City

Bucharest

2012*

3.3

2013*

4.0

2014*

1.1

 

 

City

Budapest

2012*

5.7

2013*

1.7

2014*

-0.2

 

 

City

Buenos Aires

2012*

10.8

2013*

10.9

2014*

23.9

 

 

City

Cairo

2012*

7.1

2013*

9.4

2014*

10.1

 

 

City

Chicago

2012*

2.1

2013*

1.5

2014*

1.6

 

 

City

Copenhagen

2012*

2.4

2013*

0.8

2014*

0.6

 

 

City

Doha

2012*

1.9

2013*

3.1

2014*

3.1

 

 

City

Dubai

2012*

0.7

2013*

1.1

2014*

2.3

 

 

City

Dublin

2012*

1.7

2013*

0.5

2014*

0.2

 

 

City

Frankfurt

2012*

2.0

2013*

1.5

2014*

0.9

 

 

City

Geneva

2012*

-0.7

2013*

-0.2

2014*

0.0

 

 

City

Helsinki

2012*

2.8

2013*

1.5

2014*

1.0

 

 

City

Hong Kong

2012*

4.1

2013*

4.4

2014*

4.4

 

 

City

Istanbul

2012*

8.9

2013*

7.5

2014*

8.9

 

 

City

Jakarta

2012*

4.3

2013*

6.4

2014*

6.4

 

 

City

Johannesburg

2012*

5.7

2013*

5.4

2014*

6.4

 

 

City

Kiev

2012*

0.6

2013*

-0.3

2014*

12.2

 

 

City

Kuala Lumpur

2012*

1.7

2013*

2.1

2014*

3.1

 

 

City

Lima

2012*

3.7

2013*

2.8

2014*

3.2

 

 

City

Lisbon

2012*

2.8

2013*

0.3

2014*

-0.3

 

 

City

Ljubljana

2012*

2.6

2013*

1.8

2014*

0.2

 

 

City

London

2012*

2.8

2013*

2.6

2014*

1.5

 

 

City

Los Angeles

2012*

2.1

2013*

1.5

2014*

1.6

 

 

City

Luxembourg

2012*

2.7

2013*

1.7

2014*

0.6

 

 

City

Lyon

2012*

2.0

2013*

0.9

2014*

0.5

 

 

City

Madrid

2012*

2.4

2013*

1.4

2014*

-0.1

 

 

City

Manama

2012*

2.8

2013*

3.2

2014*

2.8

 

 

City

Manila

2012*

3.2

2013*

3.0

2014*

4.1

 

 

City

Mexico City

2012*

4.1

2013*

3.8

2014*

4.0

 

 

City

Miami

2012*

2.1

2013*

1.5

2014*

1.6

 

 

City

Milan

2012*

3.0

2013*

1.2

2014*

0.2

 

 

City

Montreal

2012*

1.5

2013*

0.9

2014*

1.9

 

 

City

Moscow

2012*

5.1

2013*

6.8

2014*

7.8

 

 

City

Mumbai

2012*

9.3

2013*

10.9

2014*

6.4

 

 

City

Munich

2012*

2.0

2013*

1.5

2014*

0.9

 

 

City

Nairobi

2012*

9.4

2013*

5.7

2014*

6.9

 

 

City

New Delhi

2012*

9.3

2013*

10.9

2014*

6.4

 

 

City

New York City

2012*

2.1

2013*

1.5

2014*

1.6

 

 

City

Nicosia

2012*

2.4

2013*

-0.4

2014*

-1.4

 

 

City

Oslo

2012*

0.7

2013*

2.1

2014*

2.0

 

 

City

Paris

2012*

2.0

2013*

0.9

2014*

0.5

 

 

City

Prague

2012*

3.3

2013*

1.4

2014*

0.3

 

 

City

Riga

2012*

2.2

2013*

0.0

2014*

0.6

 

 

City

Rio de Janeiro

2012*

5.4

2013*

6.2

2014*

6.3

 

 

City

Rome

2012*

3.0

2013*

1.2

2014*

0.2

 

 

City

Santiago de Chile

2012*

3.0

2013*

1.8

2014*

4.4

 

 

City

Sao Paulo

2012*

5.4

2013*

6.2

2014*

6.3

 

 

City

Seoul

2012*

2.2

2013*

1.3

2014*

1.3

 

 

City

Shanghai

2012*

2.7

2013*

2.6

2014*

2.0

 

 

City

Sofia

2012*

3.0

2013*

0.9

2014*

-1.4

 

 

City

Stockholm

2012*

0.9

2013*

0.0

2014*

-0.2

 

 

City

Sydney

2012*

1.8

2013*

2.4

2014*

2.5

 

 

City

Taipei

2012*

1.9

2013*

0.8

2014*

1.2

 

 

City

Tallinn

2012*

3.9

2013*

2.8

2014*

-0.1

 

 

City

Tel Aviv

2012*

1.7

2013*

1.5

2014*

0.5

 

 

City

Tokyo

2012*

0.0

2013*

0.4

2014*

2.7

 

 

City

Toronto

2012*

1.5

2013*

0.9

2014*

1.9

 

 

City

Vienna

2012*

2.5

2013*

2.0

2014*

1.6

 

 

City

Vilnius

2012*

3.1

2013*

1.1

2014*

0.1

 

 

City

Warsaw

2012*

3.6

2013*

1.0

2014*

0.1

 

 

City

Zurich

2012*

-0.7

2013*

-0.2

2014*

0.0

 

 

Exchange rates used and inflation: How stable is my currency?

Changing exchange rates should – in theory and in the long run – compensate for differences in inflation across countries and cities. If US inflation is 2% higher than the Eurozone’s for an extended time, the US dollar should depreciate 2% per year against the euro. However, exchange rates tend to fluctuate more than inflation differences across currency areas, due to political events, economic developments, and/or monetary policy decisions by central banks. This helps to explain the relative movements of cities in our rankings.

The Swiss National Bank dropped the 1.20 EURCHF floor on January 15, 2015. The impact of this decision was still being reflected in exchange rates a few months later, when we were collecting data. The Swiss franc appreciated 5% against the US dollar between the beginning of the year and April. This greatly affected our indicators, as Zurich and Geneva both rose to the top in price and wage levels. 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.

The trade and financial sanctions imposed on Russia by Western Europe and the USA since the Ukraine conflict in mid-2014 has had a sizeable impact on the Russian ruble, which has lost almost 42% of its value in US dollar terms since 2012. The Ukrainian hryvnia also experienced an over 64% drop relative to the US dollar after the Ukrainian central bank stopped supporting its reserves in early 2014. This also led to 12% local inflation that year. Both Russia and Ukraine plummeted in our rankings, with Kiev now at the bottom of our price and wage-level charts.

Overview Economic and political instability in South America greatly affected exchange rates, placing certain countries in unfavorable positions. The Brazilian real has depreciated almost 35% against the US dollar since 2012 due to continuously declining foreign trade. This resulted in official inflation figures of over 6% in 2013 and 2014. Countries like Argentina and Colombia faced similar fates.

The Asian scene is mixed. The Japanese yen lost value but the South Korean won appreciated versus the US dollar. Japan has yet to experience the growth promised by Abenomics, introduced in 2013, though inflation has risen from 0.0% in 2012 to 2.7% in 2014. The South Korean won has gained over 6% against the US dollar since 2012, with inflation falling from 2.2% in 2012 to 1.3% in 2014.
 

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