Delhi and Mumbai are one of the least expensive cities in the world suggests the latest World Cost of Living 2012 Survey. It was noted that Arab city Muscat in Oman led the list of the least expensive cities also including Dhaka, Katmandu and Karachi.
The Economist Intelligence Unit survey is conducted twice annually and compares more than 400 prices across 160 products and services and it includes food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs. The survey compared living costs in 130 cities and crowned Zurich as the world’s most expensive city for the first time in more than 20 years. It is also noted that Western Europe still accounts for 24 of the most expensive cities in the top 50, with 14 hailing from Asia.
It was noted that although Asian hubs are making their presence felt at the top of the cost of living stakes, another kind is also making its presence felt at the bottom. Three of the four cheapest locations hail from the Indian subcontinent, stressing why India has been such a target of labor outsourcing, relocation and FDI over the last decade. There seems to be more structural basis, with cheap labor and land costs making India and Pakistan very attractive to those bargain hungry visitors or investors willing to be daring some of the security risks that accompany such low prices, especially in Pakistan.
The ten most expensive cities were Zurich at position one, followed by Tokyo. Geneva and Osaka Kobe followed next. Oslo and Paris ranked fifth and sixth respectively. Sydney and Melbourne were on the seventh and eighth position respectively while Singapore was on the ninth. Frankfort took the tenth position.
The survey recorded that an index swing of 34 percentage points pushed the Swiss city up 4 places compared to last year to overtake Tokyo which remains in second place. Geneva, the other Swiss city surveyed with a 30 percentage point rise in the cost of living to move up six places into joint third alongside Osaka. Japan and Switzerland both have seen strong currency movements over the last few years which have made them relatively more expensive. Especially Switzerland in the last year has seen this change where investors looking for a haven currency outside the stressed Eurozone have invested heavily in the Swiss Franc, prompting an unprecedented move by the Swiss government to peg the Swiss Franc to the Euro to keep the currency competitive.
The ten least expensive cities consisted of Muscat, Dhaka, Algiers, Kathmandu, Panama City, Jeddah, New Delhi, Tehran, Mumbai and Karachi.
The content in the survey reports is derived from the extensive economic, financial, political and business risk analysis of over 203 countries worldwide. The cost of petrol prices in New Delhi is noted to have more than doubled in the past decade in U.S. dollar terms, while rice prices have increased almost threefold and a marginal increase is seen in the cost of a loaf of bread.
It was also recorded that the cheapest cities in the ranking are dominated by Asian and Middle Eastern cities. The latter owes, in part, to the use of price controls and the pegging of currencies to the U.S. dollar.
In India the GDP spilt in agriculture is noted to be 3.5 percent in 2012 and is expected to decrease to 3.0 percent in 2013. In the industry sector a percentage change of 4 percent is noted in 2012 and is expected to be 8 percent in 2013. In the service sector 8.8 percent in 2012 is noted and is expected to increase to 9.2 in 2013.
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