SINGAPORE -- Osaka has surpassed Paris to become one of the world's three most expensive cities, tying Singapore and Hong Kong for the top spot in this year's edition of the Economist Intelligence Unit's Worldwide Cost of Living Survey.
With Tokyo, in eighth place, Asia is home to four of the 10 priciest places to live. In Osaka, a loaf of bread goes for an average of $5.63, nine times more than the $0.61 average in the cheapest city, Damascus.
Slow economic growth in Singapore last year and the disruption from months of protests in Hong Kong did not knock the two financial hubs off their perches, but that could soon change, noted the research outfit's global chief economist, Simon Baptist.
"While they do stay in the top position, their relative price [compared to other cities] has been falling over time," Baptist said. "If that trend continues," he added, "it's quite possible that Singapore and Hong Kong come down" in the next one or two years.
The spreading coronavirus pandemic, he added, is likely to affect future editions of the rankings, pushing up living costs "a small amount, on a net basis."
The survey covers 133 cities and compares more than 400 prices of 160 products and services -- from food, beverages and clothing to household items and utility bills. The burden on residents is measured with a Worldwide Cost of Living index, using New York as a base city.
Explaining Osaka's surge into the lead, Baptist said western Japan's commercial hub is more expensive than Tokyo "for clothing, and also for recreation, so for example, access to sports clubs."
Although Tokyo climbed five spots, he said some aspects of life in the Japanese capital have become more affordable. "Utility prices for electricity and gas have been coming down in Tokyo, as compared to in other cities," Baptist said. "This is a result of the reforms in the electricity market where there is now more competition in Tokyo than there has been."
The researchers found the average price of a men's two-piece business suit in Osaka stood at $1,483.82, far above the $960.85 in Tokyo.
Paris, which shared the top rank with Singapore and Hong Kong in last year's report, slipped to fifth, after New York. At the other end of the spectrum, several Asian cities rank among the world's least expensive: Uzbekistan's Tashkent, Kazakhstan's Almaty, Pakistan's Karachi, and India's Chennai, Bangalore and New Delhi all made the list of the 10 cheapest metro areas.
"Despite rapid population growth and fast-growing economies in the region, South Asia remains structurally cheap as a result of low wages and high levels of income inequality, which limit household spending, as well as strong retail competition, suppressing potential price rises," the report notes.
As a region, the study points out, Asia has the most varied cost of living -- given the vast gulf separating the South and Central Asian cities from Osaka, Singapore and Hong Kong.
Overall, the average cost of living in the surveyed cities fell by around 4%, reflecting the impact of easy monetary policy on currencies and uncertainty over the U.S.-China trade tensions.
Currency shifts were a major factor. South Korea's capital Seoul, for instance, dropped out of the 10 most expensive cities due to the depreciation of the won, the report says.
Looking ahead, Baptist said business shutdowns and supply chain disruptions due to the coronavirus outbreak will have an impact, too. "I think the supply chain disruption will have a more systematic effect," he said, "with prices of a lot of goods rising as a result."