Kathmandu among world’s least expensive cities

Although Kathmanduites are persistently haunted by ever-rising prices of commodities, Kathmandu is one of the least expensive cities in the world.

Kathmandu is among the least expensive out of 131 cities across 93 nations, according to Worldwide Cost of Living 2014 published by Economist Intelligence Unit. The last year’s report had ranked Nepal’s capital as the sixth least expensive city in terms of cost of living.

According to the report, India’s financial hub, Mumbai, is the cheapest city. On the other hand, Singapore has replaced Tokyo as the most expensive city, making Asia home to both most and least expensive cities. The report prepares the ranking based on comparison of all cities taking New York as its base, which has an index set at 100. Worldwide Cost of Living survey compares more than 400 individual prices across 160 products and services. These include food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs.

Among the 10 least expensive cities compared to the Big Apple, seven are located in five Asian countries. Within Asia, the best value for money is on the Indian subcontinent — defined as India, Pakistan, Bangladesh, Nepal and Sri Lanka — according to the report.

These countries appear to be economical than their Western counterparts due to recent fall in exchange rates. As currencies in Asian countries took a beating to US dollars, the prices of commodities and service became cheaper, pulling the relative cost of living down. The report has called Mumbai’s title as the world’s cheapest city a reflection of the structural factors that define price within the Indian subcontinent.

The report has reasoned low wages, combined with a cheap and plentiful supply of goods into cities, as well as government subsidies on some products, as factors keeping prices down in Mumbai.

On the other hand, Singapore’s steady climb towards becoming the expensive, from 18th rank 10 years ago, is attributed to 40 per cent currency appreciation and solid price inflation over the past decade.

Though Kathmandu is ranked one of the cheapest cities, the report has called Nepal one of the countries with ‘well documented security issues or domestic unrest’, same as Pakistan and Syria. According to government statistics as well, the rate of price rise is less in Kathmandu than in other regions. The yearly inflation statistic of fiscal year 2012-13 show that Kathmandu recorded 7.4 per cent price rise, while the Tarai and hill regions posted year-on-year inflation of 8.1 per cent and 9.7 per cent, respectively. The national inflation stood at 9.9 per cent in the year.

Kathmandu is the centre of distribution for most food items and non-food commodities such as clothing, utilities, furnishing, among others, making the Valley relatively less expensive than other parts.

source: Himalayan Times, 05 Feb 2014

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