According to the Worldwide Cost of Living 2015 survey published by the Economist Intelligence Unit (EIU), one kilogram of bread in Geneva costs US$ 7.48. This is the third most expensive of the world’s top ten most expensive cities. Only Paris and Seoul have more expensive bread, costing US$ 8.83 and US$ 13.91 per kilogram respectively.
After looking at the cost of bread and 159 other products and services, and then adjusting for the recent surprise increase of the Swiss franc, Zurich and Geneva are the two most expensive cities in the world. Zurich and Geneva have cost of living scores of 136 and 130 respectively. New York is the base city with a score of 100.
The surprise move by the Swiss National Bank in January and a post-survey exchange rate adjustment, pushed Zurich and Geneva ahead of the previous 2015 winner Singapore, with a score of 129.
The report shows the hefty impact of exchange rates on cost of living comparisons across cities in different countries. Caracas in Venezuela is an extreme example. This time the survey used an alternative to Venezuela’s official exchange rate, which became farcical after falling oil prices destroyed government finances and lead to rampant local inflation. This exchange rate switch took Caracas from the top ten to the bottom five, a fall of 124 places.
The survey also shows how quickly things can change. The Swiss franc has moved so much recently that the original 2015 rankings for Zurich and Geneva are already out of date.
When boiled down, all this report really tells us is that cities with expensive currencies are expensive. In addition, when currencies move their cities’ costs move with them. Other than this it is not particularly illuminating. What is most important for residents is affordability based on their income. According to another recent survey Switzerland was ranked the most affordable country.
There are however some price differences that cannot be explained by exchange rates. According the the EIU survey, bread prices vary significantly across Switzerland. Zurich’s bread is 20% cheaper (US$ 5.96 per kilogram) than Geneva’s (US$ 7.48 per kilogram). But there are swings and roundabouts. An average bottle of wine in Zurich costs US$ 15.93 versus US$ 8.49 in Geneva, so a wine and cheese evening will cost less in Geneva, assuming a typical wine to bread ratio. Perhaps someone will do some detailed research on this one day. If they do we will be sure to write about it.