The first of which is the amount of money a person earns, and the other is what they choose to spend their money on. The latter is influenced by the cost of living in the city where they reside—an ever-changing metric that is driven by a wide variety of factors, such as currency, population growth, or external market movements. Today’s graphic visualizes the findings from the 2020 Worldwide Cost of Living report and uses data from 133 cities to rank the most expensive cities in the world. Note: Report research was conducted towards the end of 2019, before the COVID-19 outbreak.
Asia Dominates the Ranking
Globally, the cost of living has fallen by an average of 4% over the last year, with much of the movement up and down the ranking being driven by currency fluctuations. The locations with the highest cost of living are largely split between Europe and Asia. For the second time in the report’s 30-year history, three cities are tied as the top spot—Singapore, Hong Kong, and Osaka. Source: EIU. New York City is index baseline (score = 100). Ties in index score values are denoted by (t). Osaka is a newcomer to the top spot, climbing four places over the last year to join cost of living heavyweight champions, Singapore and Hong Kong. As Japan’s third-largest city, Osaka is a major financial hub and a breeding ground for emerging startups, with relatively low real estate costs compared to Singapore and Hong Kong. Three European cities (Paris, Zurich, and Geneva) sit atop the most expensive city rankings, compared to seven cities only 10 years ago. Similarly, 31 of the 37 European cities have seen a decrease in cost of living overall—largely as a result of the Euro or local currencies losing value relative to the U.S. dollar. Finally, the top 10 is rounded out with two cities from the United States (New York, Los Angeles) and one from Israel (Tel Aviv).
The Cheapest Cities
While East Asia is home to many of the world’s most expensive cities, South Asia hosts the largest grouping of cities with the lowest cost of living. Source: EIU. New York City is index baseline (score = 100). Ties in index score values are denoted by (t). Three Indian cities dominate the cheapest cities ranking due to a combination of low wages and high levels of income inequality, preventing any price increases. Meanwhile, political and economic turmoil is a common denominator among the cheapest cities outside of South Asia. For example, the Syrian Civil War resulted in an economic collapse, leading to high inflation and a downward spiral in value for the Syrian pound.
A Spanner in the Works
The COVID-19 pandemic is estimated to cost the global economy up to $2 trillion in 2020, so while governments attempt to boost the economy, many are concerned about higher inflation rates spreading across the world. With a recession becoming more likely, uncertainty around real estate prices will heighten for every city, regardless of their cost of living ranking. As we navigate chaotic and uncertain times, the next cost of living survey could look very different to today—the most important question will be how permanent the damaging effects of the pandemic will be. on Today’s chart measures the extent to which 41 major economies are reopening, by plotting two metrics for each country: the mobility rate and the COVID-19 recovery rate: Data for the first measure comes from Google’s COVID-19 Community Mobility Reports, which relies on aggregated, anonymous location history data from individuals. Note that China does not show up in the graphic as the government bans Google services. COVID-19 recovery rates rely on values from CoronaTracker, using aggregated information from multiple global and governmental databases such as WHO and CDC.
Reopening Economies, One Step at a Time
In general, the higher the mobility rate, the more economic activity this signifies. In most cases, mobility rate also correlates with a higher rate of recovered people in the population. Here’s how these countries fare based on the above metrics. Mobility data as of May 21, 2020 (Latest available). COVID-19 case data as of May 29, 2020. In the main scatterplot visualization, we’ve taken things a step further, assigning these countries into four distinct quadrants:
1. High Mobility, High Recovery
High recovery rates are resulting in lifted restrictions for countries in this quadrant, and people are steadily returning to work. New Zealand has earned praise for its early and effective pandemic response, allowing it to curtail the total number of cases. This has resulted in a 98% recovery rate, the highest of all countries. After almost 50 days of lockdown, the government is recommending a flexible four-day work week to boost the economy back up.
2. High Mobility, Low Recovery
Despite low COVID-19 related recoveries, mobility rates of countries in this quadrant remain higher than average. Some countries have loosened lockdown measures, while others did not have strict measures in place to begin with. Brazil is an interesting case study to consider here. After deferring lockdown decisions to state and local levels, the country is now averaging the highest number of daily cases out of any country. On May 28th, for example, the country had 24,151 new cases and 1,067 new deaths.
3. Low Mobility, High Recovery
Countries in this quadrant are playing it safe, and holding off on reopening their economies until the population has fully recovered. Italy, the once-epicenter for the crisis in Europe is understandably wary of cases rising back up to critical levels. As a result, it has opted to keep its activity to a minimum to try and boost the 65% recovery rate, even as it slowly emerges from over 10 weeks of lockdown.
4. Low Mobility, Low Recovery
Last but not least, people in these countries are cautiously remaining indoors as their governments continue to work on crisis response. With a low 0.05% recovery rate, the United Kingdom has no immediate plans to reopen. A two-week lag time in reporting discharged patients from NHS services may also be contributing to this low number. Although new cases are leveling off, the country has the highest coronavirus-caused death toll across Europe. The U.S. also sits in this quadrant with over 1.7 million cases and counting. Recently, some states have opted to ease restrictions on social and business activity, which could potentially result in case numbers climbing back up. Over in Sweden, a controversial herd immunity strategy meant that the country continued business as usual amid the rest of Europe’s heightened regulations. Sweden’s COVID-19 recovery rate sits at only 13.9%, and the country’s -93% mobility rate implies that people have been taking their own precautions.
COVID-19’s Impact on the Future
It’s important to note that a “second wave” of new cases could upend plans to reopen economies. As countries reckon with these competing risks of health and economic activity, there is no clear answer around the right path to take. COVID-19 is a catalyst for an entirely different future, but interestingly, it’s one that has been in the works for a while. —Carmen Reinhart, incoming Chief Economist for the World Bank Will there be any chance of returning to “normal” as we know it?
