The Economist Intelligence Unit finds Bengaluru the world’s third cheapest city, Chennai comes sixth.

Bengaluru Chennai among worlds cheapest cities but are they less liveable T Nagar market in Chennai. Photo by McKay Savage via Flickr
news Economy Wednesday, March 22, 2017 - 14:50

Indian metros Bengaluru, Chennai, Mumbai and New Delhi are cities of extremes. You will find the poshest people and facilities there but you will also find enough pocket friendly avenues too. Perhaps that is why all the four have made it to the top ten cheapest cities in the world according to a report by The Economist Intelligence Unit (EIU).

Bengaluru is the third cheapest city in the world and Chennai is the sixth. Mumbai and New Delhi rank at seventh and tenth respectively as per the Worldwide Cost of Living 2017. The city with the lowest cost of living globally is Almaty in Kazakhstan, followed by Lagos, Nigeria.

The Worldwide Cost of Living is done bi-annually (twice a year). It compares over 400 individual prices across 160 products and services, including “food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs”.

And while that would appear to be good news, some people were clearly surprised at the assessment of Bengaluru and Chennai being two of the cheapest cities in the world.

Check out some of these reactions:

Meanwhile Singapore retained the spot for the world’s most expensive city for the fourth year in a row. Hong Kong came second and Zurich was the third most expensive city to live in.

“Asia now accounts for half of the ten most expensive cities ranked. Western Europe accounts for a further four cities, while New York City is the lone North American representative,” said the EIU report.  

Asia also accounts for many of the world’s cheapest cities, with “the best value for money” usually being from South Asian cities, especially in India and Pakistan. And Indian cities constitute almost half of the world’s cheapest cities.

However, the report explains why the ‘cheapest’ tag may be surprising for those living in the city and not seeing any such change in their expenditure. Taking the example of Almaty, the report says:

“Almaty’s citizens may not feel that the city is getting cheaper; despite measures to control prices, Almaty has seen inflation approaching 20% during 2016. However local price rises have not completely offset a 50% devaluation in the tenge (the Kazakh currency), since it was allowed to float in August 2015.”

Further, many cities are becoming cheaper due to political or economic disruption. This is especially true for the Indian subcontinent, which the report points out, “remains structurally cheap, [with] instability is becoming an increasingly prominent factor in lowering the relative cost of living of a location.”

This implies that the cities which are the cheapest to live in also come with some element of risk. As the EIU report puts it: “Cheaper cities tend also to be less liveable.”

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