Weaker currency pushes Hong Kong down on cost of living to fourth most expensive in the world
City drops two places in survey carried out by the Economist Intelligence Unit as the Hong Kong dollar dropped to a three-decade low
Hong Kong dropped two places to the fourth most expensive city in the world, due to its weakening currency and low inflation, according to the latest cost of living survey conducted by the Economist Intelligence Unit.
The city’s currency, pegged with the US dollar since 1983, weakened to a three-decade low last week. It was traded at 7.8406 per US dollar, declining around one per cent for the past 52 weeks.
“We expect the down pressure on the currency to continue into the next year,” said Nikita Sisaudia, urban data researcher at the Economist Intelligence Unit. “In the very near future, we may see a further drop for Hong Kong [on the list].”
Hong Kong has a cost-of-living index of 111 this year, down from 114 one year ago, but still pricier than New York, the base city with an index of 100 used by the survey.
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While housing prices and rents continue to rise in Hong Kong, low inflation has kept general groceries relatively cheaper than other cities in the top 10. The price of a 1kg loaf of bread in Hong Kong dropped 10 per cent to US$4.16 this year, lower than Paris and Zurich, which are ahead of Hong Kong on the list.
The composite consumer price index (CPI) in Hong Kong, a gauge to measure inflation for all families in the city, only increased 1.7 per cent in 2017, compared with one year before.