Price rises are forecast to ease in 2023 (Representational image)
The cost of living is climbing at an exceptionally fast pace across major cities of the world, impacting people's behaviours and spending patterns. Simply put, the cost of living means the amount of money that a person needs to buy food, housing, and other basic things. According to the Economist Intelligence Unit's Worldwide Cost of Living report, the cost of living in 172 of the world's major cities rocketed an average of 8.1% over the past year, driven by factors including the pandemic and war in Ukraine.
On Tuesday, the World Economic Forum shared a video on LinkedIn, addressing the cost of living crisis by listing the world's 5 most expensive cities of 2022. While New York and Singapore emerged as the joint-most expensive cities to live in, Tel Aviv, Hong Kong and Los Angeles took the next spots.
While the video emphasises how the cost of living significantly increased throughout 2022, this year is expected to fare a little better. ''Globally, the good news is that price rises are forecast to ease in 2023..'', a text insert on the video reads.
Watch the video here:
An Economist Intelligence Unit (EIU), report says that global consumer price inflation will fall from an average of 9.4% in 2022 to 6.5% in 2023. "We expect this partial drop to be reflected in next year's survey, bringing a little relief to hard-pressed households," the survey team said.
The report also cited World Economic Forum's 2022 Chief Economists report, published in September 2022. The report agreed there would be a "dampening of inflationary pressures" in 2023 but added this would be at the cost of a sharp fall in global growth which would hit the least well-off the hardest.
Having said that, a majority of Economists also thought that a global recession was somewhat or extremely likely in 2023. "As policy-makers seek to rein in inflation they risk triggering a recession and a spike in unemployment," the report warned.
Meanwhile, a November 2022 survey gauging the mood of the public reflected their concerns, with many saying that they don't hold out much hope for an improvement in finances this year, World Economic Forum reported.
After interviewing almost 25,000 adults in 36 countries, a majority of users said that they thought inflation, interest rates and unemployment would continue to rise in 2023. Meanwhile, 79% of people said they are expecting their real income to fall in 2023. People also expect their household spending to rise over the next six months.
The public has mostly blamed the state of the global economy for the cost of living crisis.
''The blame for the rising cost of living is primarily placed on the global economy, but Russia's invasion of Ukraine and individual countries' financial governance and policies are also regularly cited,'' the report said.