Damascus, the capital of Syria, is the cheapest city in the world for the year 2020, according to The Economist Intelligence Unit (EIU). Damascus is followed by the Central Asian cities of Tashkent and Almaty as the least expensive cities. The fourth rank is jointly held by Argentina’s capital, Buenos Aires, and Karachi in Pakistan.
In 2019, Caracas was ranked as the world’s cheapest city, but Venezuela’s capital has slid down to the sixth position in 2020 mainly due to rising inflation in the country resulting from economic instability and sanctions. Lusaka (Zambia) has climbed 13 places from last year to be ranked among the 10 cheapest cities. The Worldwide Cost of Living survey, conducted bi-annually by EIU, includes 133 cities worldwide.
While the cheapest cities offer far greater value for money, they do not come without various types of risks. Political turmoil and security are major challenges in many of these cities. Infrastructure and the decaying environment are further issues that make most of these cities far “less livable” compared to the most expensive cities in the world.
10 Cheapest Cities for 2020
The 10 cheapest cities in the world include seven Asian cities, with four of them being from South Asia. Two cities are from South America, while one is African. Inflation and currency fluctuations are the primary factors influencing these rankings. The least expensive cities in 2020, along with their index scores, are as follows.
- Damascus (Syria) – 25
- Tashkent (Uzbekistan) – 30
- Almaty (Kazakhstan) – 34
- Buenos Aires (Argentina) – 35
- Karachi (Pakistan) – 35
- Caracas (Venezuela) – 36
- Lusaka (Zambia) – 38
- Chennai (India) – 39
- Bangalore (India) – 40
- New Delhi (India) – 42
Syria’s economy has been disrupted by war for over nine years now. Despite the country experiencing 28 percent inflation during 2017, the decline in the value of the Syrian pound has meant that Damascus has once again become the world’s cheapest city when ranked in terms of US dollars.
Venezuela experienced hyperinflation of nearly 1,000,000 percent in 2018, following which the country introduced a new currency – the bolivar soberano – but uncertainty has remained high in Caracas, and commodities such as clothing and jewelry have been used as mediums of exchange.
Despite three Indian cities being among the 10 cheapest cities in the world, South Asia has actually become relatively expensive over the past few years. Five years ago, four out of the five cheapest cities were in South Asia, but now only Karachi is among the top five. While cities such as Damascus have become extremely cheap for expats due to wars and conflicts, South Asian cities remain structurally cheap due to low wages, income inequality, and strong retail competition.
Cheapest Cities by Category
Among the 10 cheapest cities, the average price of 1kg loaf of bread is the lowest in Damascus at $0.61, followed by Lusaka at $0.87. A men’s two-piece business suit costs the cheapest, on average, in New Delhi at $137, with Bangalore ($146) being the next cheapest. The price of a women’s haircut is the least in Caracas at $6.39 (up from $1.77 in 2019), followed by Damascus ($7.77).
Cities with a Declining Cost of Living
Over the past one year, Sofia (Bulgaria) has moved 16 ranks up to be 27th cheapest city on the list. Casablanca (Morocco) and Reykjavik (Iceland) have each moved 14 places up, making them the joint-second biggest movers up from 2019. Three other European cities are also among the 10 biggest movers up in 2020: Rome, Dusseldorf, and Belgrade. These movements are typically influenced by local currency weaknesses, according to EIU.
The rankings are based on a bi-annual survey by The Economist Intelligence Unit comparing over 400 individual prices for 160 goods and services in each of the 133 cities included in the survey. These include food, clothing, home rents, utility bills, transport, personal care items, recreation, and private schools, among other categories. The gathered prices are then converted into the US dollar and are weighted identically across all cities to create a comparative index.
You can download the Worldwide Cost of Living 2020 report after registering on The Economist Intelligence Unit website.