Zurich passed New York to become one of the two most expensive cities to live in this year, according to the Economist Intelligence Unit (EIU), as the Swiss franc weakened and inflation pushed up the prices of groceries, household goods, and recreation.

The Swiss financial hub tied with Singapore as the world’s most expensive city in 2023 in the EIU’s annual Cost of Living survey, taking over New York’s pole position last year. The study looked at the prices of hundreds of goods and services across 173 major cities. 

The world’s biggest cities were defined by soaring inflation for a second year in a row as prices rose on average by 7.4%. It marked a slight decline from the record 8.1% rate from 2022.

That inflation was more pronounced in Europe, as eurozone CPI pushed past 10% last year and increased the strain on cities in the continent compared with the U.S. and Asia. A weaker dollar in 2023 has also made cities in the States more affordable to live in, helping the cost of living in New York rise by just 1.9% this year.

According to the EIU, Europe is now home to four of the world’s 10 most expensive cities, with Geneva, Paris, and Copenhagen joining Zurich near the top of the list.

While utility prices fell markedly from 2022 following Russia’s invasion of Ukraine, the EIU said grocery prices remained elevated globally as retailers managed to pass on higher costs to consumers and increasingly unpredictable weather events kept suppliers guessing.

The rising cost of rent in major cities has pushed people further from work, and with a 10.7% rise in the cost of transport this year, that has also increased living costs in many places.

But as inflation begins to fall closer to its 2% target in most major economies, there is hope that 2024 will see an ease to the eye-watering price increases experienced over the past couple of years.

“We expect inflation to continue to decelerate in 2024, as the lagged impact of interest-rate rises starts affecting economic activity, and in turn, consumer demand,” said Upasana Datt, head of worldwide cost of living at the EIU. 

“But upside risks remain—further escalations of the Israel-Hamas war would drive up energy prices, while a greater than expected impact from El Niño would push up food prices even further.”

Zooglers feeling the heat

Rising prices will be a pinch for Zurich’s thousands of Google employees, who have previously been blamed for driving up house prices in the city.

Buyers in Zurich face house prices exceeding 1,468 Swiss francs (around $1,617) per square foot, much higher than the €1,000 (around $1,060) rate in Paris and around €790 ($861) in London.

The city is home to 5,000 so-called Zooglers, whose exorbitant salaries are seen as part of the cause for unaffordable housing in Zurich and its surrounding areas.