January 31, 2006

Oslo is World’s Most Expensive City: Survey

LONDON -- After 14 years ranked as the most expensive city in the world for expatriates, Tokyo has been knocked off the top spot by Norway's capital Oslo, a survey showed on Tuesday.

The biannual survey by the Economist Intelligence Unit (EIU) compares the cost of goods and services in dollar terms. The rise of Oslo and other European cities partly reflects the long-term under performance of the U.S. currency.

Iceland's capital Reykjavik jumped to third place ahead of Japan's Osaka and eight of the top 10 cities are in Europe. New York, the highest-ranked U.S. city, slipped to 27th place.

"The displacement of Tokyo comes as little surprise. A gradually weakening yen has been compounded by years of low inflation and deflation in the Japanese economy," the EIU said.

"Norway has seen strong economic growth following a recovery in 2004, enjoying high consumer confidence, rampant investment and still-low interest rates."

Several eastern European countries also became more expensive. The main cities in Serbia and Montenegro, Romania, Ukraine, Poland, the Czech Republic and Turkey all saw a relative increase of more than 5 percent in the cost of living.

In Latin America, the two biggest jumps came in Brazil, with Rio de Janeiro and Sao Paulo climbing 22 places to joint 87th on the back of a 25 percent rise in the currency and rising consumer prices.

Iran's capital Tehran, the city ousted from top spot by Tokyo 14 years ago after its currency was revalued, remains the cheapest of the 130 cities ranked worldwide by the EIU.