Hong Kong, Paris and Zurich are the world's most expensive cities for the workforce this year, according to the Economist Intelligence Unit (EIU)'s 2020 worldwide cost of living index.
While Asian cities have dominated the top spots in the index in the past years, due to the pandemic the rankings has been reshuffled, with Paris and Zurich overtaking Singapore and Osaka's place. The two Asian jurisdictions now ranked fourth and fifth respectively, due to deflationary pressures as a result of shrinking domestic demand and government action.
Hong Kong is the only Asian city that retains the top spot. The good news is that Hong Kong has reported the sharpest fall (13%) in rental costs. The report cited the exodus of expatriates after the National Security Law was introduced as a possible reason.
The report explains that the pandemic has changed the order of employees' most essential products and services. Rent and the cost of home-working are now one of the biggest job-related expenses for the global workforce. For example, there is a sharp increase in the prices of computers, while there has been a decline in clothing prices.
Healthcare fees have seen rises in Paris and Zurich.
The 10 most expensive cities for the Internet:
4. Abu Dhabi
6. Jeddah, Riyadh (Saudi Arabia)
8. Hong Kong
10. Panama City
The cost of travel has become less important to many employees, as travel restrictions continue and working from home becomes commonplace.
While the work-from-home phenomenon has lowered the cost of commuting for employees, executives are facing increased utility bills.
"We anticipate these trends to continue long into 2021, and so human resource managers may need to change the way they calculate salaries or cost-of-living allowances to take lifestyle shifts into account in the short term,” said Upasana Dutt, head of worldwide cost of living at EIU.
The 10 most expensive cities in the world:
1. Zurich, Paris, Hong Kong
5. Tel Aviv
8. New York
10. Los Angeles
The twice-yearly survey compares more than 400 individual prices across 138 products and services in about 130 cities.