Countries With the Highest Cost of Living: Price Levels, Housing and Purchasing Power

The phrase highest cost of living sounds like it should produce one simple list. In practice, it describes several different measurements. A national price-level index compares the cost of a broad basket with the cost in other economies. A city index asks what an internationally mobile household might pay for a selected basket of goods and services. A housing-affordability measure compares rent or house prices with local income. A purchasing-power measure asks what residents can actually buy after wages, taxes and public services are taken into account.

Those measurements can point in different directions. Switzerland can have a very high household-consumption price level while also having high wages. Singapore can appear at the top of a city-focused expatriate index because housing and imported services are expensive, while another measure ranks a different city first. Denmark can be the most expensive European Union country on a consumer price-level index even though a household’s experience depends on its income, rent, taxes, family size and access to publicly provided services.1 2 3

This article therefore does not present an invented universal “top 20 countries” table assembled from incompatible websites. Instead, it explains what the major official and specialist sources actually measure, identifies countries and cities that appear in the high-cost group in those sources, and shows how to interpret the results without confusing prices with living standards.

Data note: The most current sources do not all refer to the same year. Eurostat’s latest comparative consumer-price article was updated in June 2026 and reports 2025 price levels for Europe. The World Bank’s latest global ICP benchmark is for 2021, released in 2024, with later extrapolated series. The public EIU Worldwide Cost of Living release cited here is its 2023 city survey. A serious comparison must keep those reference years visible.1 4 5

The short answer

If the question is “Which countries have the highest broad household price levels?”, the OECD’s 2025 discussion of 2023 PPP results placed Switzerland at roughly 50% above the OECD average, while Türkiye was roughly 40% of the OECD average. These are OECD comparison figures, not a complete world ranking and not a statement about every household’s budget.3

If the question is “Which EU countries had the highest consumer price levels?”, Eurostat reported that Denmark was 40% above the EU average in 2025. Bulgaria was 37% below the EU average. The Eurostat measure covers household final consumption expenditure and is constructed from PPP-based price-level indices across 36 participating European countries, but the highlighted EU comparison is based on the EU average.4

If the question is “Which cities were the most expensive for an international basket?”, the EIU’s public 2023 release said Singapore and Zurich topped its Worldwide Cost of Living ranking. That is a city result, not a country result.5 6

Question	Best-fitting source type	Result supported by the cited data	What it does not tell you
Which country has the highest broad price level?	OECD or World Bank PPP/price-level data	Switzerland appears at the high end of OECD comparisons.	It does not measure local wages, tax, rent stress or every country in the world.
Which EU country is most expensive overall?	Eurostat consumer price-level index	Denmark was 40% above the EU average in 2025.	It is not a global ranking and is not a personal monthly budget.
Which cities are most expensive for international residents?	EIU Worldwide Cost of Living	Singapore and Zurich topped the public 2023 release.	It does not rank national affordability for local residents.
Where is housing least affordable?	OECD house-price, rent and price-to-income indicators	The answer depends on the housing measure and year.	A high house-price ratio is not the same as a high grocery basket.
Where do households have the strongest purchasing power?	Income, prices, taxes and public-service data together	No single cost-of-living index answers this fully.	A low price level alone does not imply a high standard of living.

What does “cost of living” actually measure?

Cost of living is the amount of money required to purchase a defined basket of goods and services at a defined place and time. The definition becomes meaningful only after the basket is specified. A household budget might include rent, mortgage payments, utilities, food, transport, healthcare, childcare, education, communications, clothing, insurance, taxes and leisure. An expatriate basket may exclude local public services and focus on internationally comparable restaurants, apartments, schools and transport. A national statistical basket uses expenditure weights designed to represent the average household rather than a particular newcomer.

This is why two rankings can disagree without either one being fraudulent. They may use different cities, expenditure weights, housing assumptions, currencies, exchange-rate dates and treatment of taxes. One may compare a basket in Zurich with a basket in New York. Another may compare national average prices in Switzerland with national average prices across the OECD. A third may measure the cost of a healthy diet or the ratio of house prices to disposable income. Each answers a different question.

The phrase “expensive country” is therefore incomplete. A country can have high national prices because wages, rents and services are high; because it imports many goods; because it taxes particular products heavily; because its currency is strong; because housing supply is constrained; or because its geography raises transport costs. Those factors affect residents, visitors, students, retirees, remote workers and multinational employees differently.

How PPP and price-level indices make comparisons possible

Converting prices into US dollars using the market exchange rate is not enough to compare living costs. Market exchange rates reflect financial markets, trade, interest rates, risk perceptions and capital flows. They do not guarantee that a basket of groceries, rent and services costs the same amount in every country after conversion.

Purchasing power parities (PPPs) address that problem by comparing the prices of a common basket and calculating conversion rates that equalise purchasing power between economies. The World Bank’s International Comparison Program is a global statistical partnership managed under the auspices of the United Nations Statistical Commission. Its objectives include producing PPPs and comparable price-level indices and converting GDP and expenditure measures into a common currency using PPPs.1

The OECD defines a price-level index as a comparison of PPPs with market exchange rates. At the GDP level, the index provides a broad measure of how the prices of goods and services compare internationally, with the OECD used as the reference in its indicator.2 A value above the reference indicates a higher relative price level; a value below the reference indicates a lower one.

Measure	Basic question	Typical use	Main limitation
Market exchange rate	How many units of one currency trade for another?	Travel conversion, trade and financial transactions	Does not equalise local purchasing power.
PPP	What conversion rate buys a comparable basket?	Cross-country real-income and output comparisons	Depends on the basket, surveys and statistical methods.
Price-level index	How expensive is the broad basket relative to a reference economy?	Comparing national consumer or GDP price levels	It is an average, not a household budget.
Local purchasing power	What can local income buy after prices?	Comparing affordability for residents	Requires income, tax, housing and household assumptions.
City expatriate index	What does a selected international basket cost in a city?	Relocation and corporate allowances	May not represent local residents or national averages.

The World Bank’s 2021 ICP cycle, released in May 2024, provides the latest global benchmark in the ICP programme. It includes the 2021 reference year, revised 2017 results, PPP time series for 2018–2020 and extrapolated GDP PPPs for 2022–2023.1 Detailed international price comparisons take time because statistical agencies must collect prices, validate items, compile national accounts and harmonise methods. A lag is therefore normal rather than evidence that the statistics are useless.

The OECD also warns that PPP data are built from broad baskets and that detailed results are released with a lag. Its 2025 data article states that household-final-consumption price levels across OECD countries in 2023 ranged from roughly 50% above the OECD average in Switzerland to roughly 40% of the average in Türkiye.3 The same article explains that a relative price level can change even if prices rise everywhere: the key comparison is whether a country’s basket rose faster or slower than the reference basket.

Countries that appear at the high end of national price comparisons

Switzerland: high prices and high incomes are both part of the picture

Switzerland is a recurring high-cost example in OECD price-level comparisons. The OECD’s 2025 PPP analysis placed Swiss household-final-consumption prices at roughly 50% above the OECD average in 2023.3 This does not mean that every product or service was exactly 50% more expensive, and it does not mean that every resident faced the same budget. National averages combine categories that can vary widely between cities, regions and household types.

Switzerland’s cost structure reflects several factors: high wages in many sectors, expensive services, a strong currency at some exchange-rate dates, geographic constraints, cross-border shopping patterns and differences in taxation and regulation. Housing varies substantially between Zurich, Geneva, Basel, Lausanne, smaller towns and rural areas. Healthcare also requires careful interpretation because insurance premiums, deductibles and public transfers interact with household income.

The key analytical point is that Switzerland demonstrates the difference between price level and affordability. A high-price economy can still provide strong purchasing power to workers whose wages are high relative to the basket. That does not make the country cheap. It means that the social and economic consequences of high prices depend on income distribution, housing costs and public services as well as the sticker price of a restaurant meal.

Denmark: the highest EU consumer price level in Eurostat’s 2025 comparison

Eurostat’s June 2026 article reported that Denmark had the highest price level for consumer goods and services among EU countries in 2025, at 40% above the EU average. Bulgaria was the lowest at 37% below the average.4 The Eurostat measure is based on more than 2,000 goods and services surveyed across 36 European countries participating in the Eurostat-OECD PPP programme.

Denmark’s high overall price level does not imply that every category was the most expensive. Eurostat reports different leaders by category. For example, Luxembourg had the highest EU price level for food and non-alcoholic beverages, Germany for energy, and Denmark for clothing and footwear in the 2025 comparison.4 Product taxes, wages, energy systems, import exposure and market structure can make category rankings diverge.

Denmark also illustrates why prices need a reference. A price level of 140 relative to an EU average of 100 means the measured basket was 40% above that average; it does not mean that a Danish household pays 40% more than every household in every other country. The EU average is weighted and the national basket is an average. A student, a family with children, a high-income professional and a retiree will all experience the same country differently.

Norway, Iceland and other high-price European economies

Norway and Iceland frequently appear in discussions of high prices because of geography, labour costs, market size, import dependence and the structure of their service economies. The relevant official comparison should be selected carefully. The Eurostat-OECD PPP programme includes Iceland, Norway and Switzerland among the EFTA countries participating in its European price-level work.4 That makes the data useful for regional comparisons, but it does not automatically create a global country ranking.

Small or geographically remote economies can face higher logistics costs when goods travel long distances or when a small market offers less competition. The effect is not uniform: domestic energy resources, agricultural policy, tourism, exchange rates and public subsidies can lower some prices while raising others. A country with expensive restaurants may have relatively different energy or communication prices, and a national average can conceal substantial regional variation.

Luxembourg and Ireland: high prices, high incomes and measurement complexity

Luxembourg and Ireland are important examples of why price comparisons should not be replaced by GDP-per-capita headlines. The OECD’s PPP discussion notes that Luxembourg and Ireland had very high GDP per capita in 2024 flash estimates, but also warns that GDP per capita can be affected by multinational corporations and the presence of foreign residents.3 Actual Individual Consumption (AIC), which includes goods and services purchased by households as well as some services supplied by government and non-profit institutions, can be more informative for comparing material well-being.

Eurostat’s 2025 comparison identified Luxembourg as the most expensive EU country for food and non-alcoholic beverages, with prices at 122% of the EU average.4 That is a category result, not a claim that Luxembourg is the world’s most expensive country overall. Ireland’s housing market and service prices can also create a different experience from its national-income statistics. A sound article separates prices, wages, housing and output rather than treating one macroeconomic variable as a complete living-standard score.

Singapore: a high-cost city and an import- and housing-sensitive economy

Singapore appears prominently in specialist city comparisons. The EIU’s public Worldwide Cost of Living 2023 release states that its survey compares more than 200 goods and services in 173 major cities and that Singapore and Zurich topped the published city ranking.5 6

Singapore’s city-level cost profile is shaped by land scarcity, housing, transport policy, imported food and energy, labour costs, taxes and the high concentration of internationally traded services. A city index may assign a different weight to housing, private schooling or imported consumer goods than a local household budget would. That is why a multinational company’s relocation allowance and a Singaporean household’s cost-of-living experience should not be assumed to be identical.

The Singapore example also shows why country and city labels must not be mixed. Singapore is a city-state, so the national and city geographies overlap more than they do in most countries. Zurich, by contrast, is a city within Switzerland. Saying “Switzerland and Singapore are the two most expensive countries” would incorrectly convert a city comparison into a country comparison.

Why housing often changes the entire answer

Housing is frequently the largest fixed cost in a household budget, yet broad price-level rankings can understate the difference between renting in a capital city and living in a smaller town. The OECD’s housing indicators include rent-price indices, nominal and real house-price indices, and price-to-rent and price-to-income ratios.7

The OECD defines the price-to-income ratio as a nominal house-price index divided by nominal disposable income per person. It is used as an affordability measure because a house price means something different in a high-income and a low-income market. A high absolute rent can be manageable for a household with high disposable income, while a moderate rent can be unaffordable when wages are low or employment is unstable.

Housing question	Useful indicator	Interpretation
Are homes expensive relative to income?	Price-to-income ratio	Higher values generally indicate weaker purchase affordability relative to income.
Are rents rising?	Rent-price index	Tracks rent changes, not necessarily the total monthly housing burden.
Is home ownership financially attractive?	Price-to-rent ratio	Compares house prices with rents; it is not a full investment-return model.
How much do households spend on housing?	Housing cost burden	Measures the share of disposable income consumed by housing under a defined rule.
Is housing available in the right locations?	Supply, vacancy and tenure indicators	Shows constraints that a price index alone cannot reveal.

The OECD Affordable Housing Database groups indicators across housing markets, housing conditions and affordability, and public policies.8 The OECD’s Society at a Glance 2024 housing chapter highlights housing-cost burden, including the share of households spending more than 40% of disposable income on housing as a common indicator.9 No single threshold captures every household’s hardship, but housing-burden measures are closer to lived affordability than a restaurant or grocery index alone.

Housing also interacts with transport. A cheaper apartment far from employment may require a car, a long commute or additional childcare. A smaller, more expensive apartment near reliable public transport may have a higher rent but lower total mobility costs. Remote workers may value space and internet reliability differently from commuters. The correct budget is therefore a household-specific total rather than a headline national ranking.

Prices versus wages: the real purchasing-power test

A country’s cost-of-living position becomes economically meaningful only when compared with income. The International Labour Organization’s Global Wage Report 2022–23 examines real wages and purchasing power globally and by region. It reports that real wage growth fell into negative territory in the twenty-first century amid inflation and that the gap between real productivity growth and real wage growth widened.10

A simple way to think about affordability is:

Real purchasing power = income after taxes and transfers ÷ the cost of the household’s basket.

This is not a complete welfare equation, but it clarifies why a price-only ranking is incomplete. If wages rise faster than the basket, purchasing power can improve even while the country remains expensive. If prices rise faster than wages, purchasing power deteriorates. If public healthcare or education reduces private spending, a household may pay more tax but less directly at the point of use.

Situation	Price level	Wage level	Likely interpretation
A	High	High	Expensive, but potentially affordable for well-paid households.
B	Low	Very low	Cheap for visitors paid in foreign currency, but difficult for local residents.
C	Moderate	Stagnant	Affordability can deteriorate even without a high headline price level.
D	High housing, moderate goods	Mixed	Housing affordability may be the central problem rather than groceries.
E	High taxes, strong public services	High	Private bills may be lower than a gross-price comparison suggests.

The OECD’s AIC concept is useful here because it includes services households purchase directly and services provided through government and non-profit institutions.3 A country with higher taxes may provide healthcare, education, childcare or transport that a lower-tax country leaves households to purchase privately. Comparing only prices at the checkout can therefore misrepresent the resources available to residents.

Food, energy and services do not move together

The cost of living is a weighted average of categories that behave differently. Food prices respond to agricultural conditions, global commodity markets, exchange rates, supply chains and domestic competition. Energy prices reflect resource availability, taxes, regulation and wholesale markets. Services are heavily influenced by wages because haircuts, childcare, restaurant meals, repairs and medical appointments contain a high labour component.

Eurostat’s 2025 results show why category detail matters. Denmark led the EU for several categories, Luxembourg led food and non-alcoholic beverages, Germany led energy, and other countries led different product groups.4 A country can therefore be expensive for dining out but comparatively less expensive for communications, or expensive for energy but not for clothing.

The World Bank’s Food Prices for Nutrition DataHub provides a separate framework for food affordability. It combines ICP prices and availability with food-composition data and nutritional requirements to estimate the cost of a healthy diet, as well as the share of people unable to afford it.11 12 The data page reports a global average healthy-diet cost of USD 4.28 per person per day in 2025 in PPP terms and around 2.7 billion people unable to afford a healthy diet in 2025.11

Those values should not be inserted into a general country cost-of-living ranking. A healthy-diet basket answers a nutritional-access question. It does not include rent, transport, healthcare or education. Its value is that it reveals a different dimension of affordability: whether household resources are enough to buy a nutritionally adequate set of foods, not simply whether restaurants or imported brands are expensive.

Why global inflation does not erase cross-country differences

Inflation changes the level of prices over time; a price-level index compares one economy’s level with another’s. If prices rise by 10% in every economy, all countries become more expensive in nominal terms, but their relative price ordering may remain broadly similar. If one currency depreciates or local wages change, relative price levels can move even when domestic inflation is positive everywhere.

The OECD’s PPP analysis makes this distinction explicit. A country’s price level can fall relative to the OECD average without prices falling in that country; it may simply have experienced slower basket inflation than the reference group.3 This is why a 2023 index should not be copied into a 2026 article without a year label, and why a list of “cheapest countries” can age quickly after a currency or inflation shock.

Current household decisions also involve expectations. Renters care about the next lease renewal, families care about school fees and childcare, and commuters care about fuel or transit prices. A national annual average is useful for macroeconomic analysis, but it cannot forecast an individual household’s next twelve months without local and personal data.

How to compare two countries for a move or long stay

A responsible comparison begins with a household profile. Record the city, household size, housing type, school and healthcare choices, transport pattern, expected income, tax residence and time horizon. Then separate one-time setup costs from recurring spending. Deposits, visas, furniture, flights and insurance can make the first year much more expensive than later years.

Next, choose a source that matches the decision. For a macroeconomic comparison, use World Bank ICP or OECD PPP data. For EU consumer categories, use Eurostat. For corporate relocation, a specialist city basket such as the EIU may be relevant, but the full methodology and subscription data should be reviewed. For housing, use local rent and house-price data plus income. For food affordability, use the World Bank and FAO cost-of-healthy-diet measures. For wages, use national statistical agencies and ILO or OECD series.

Finally, test sensitivity. Calculate a low, central and high housing case. Vary exchange rates and inflation assumptions. Separate gross salary from after-tax income. Show the result with and without employer-provided healthcare, housing or schooling. A conclusion that changes completely when rent moves by 10% is not robust enough to present as a single precise number.

Comparison step	Question to answer	Common mistake
1. Geography	Country, region or specific city?	Calling a city ranking a country ranking.
2. Household	Who is moving and what do they need?	Using a single-person expatriate basket for a family.
3. Housing	Rent, ownership or employer-provided housing?	Treating the national average as the target city’s rent.
4. Income	Gross, net or purchasing-power-adjusted income?	Comparing prices without wages or taxes.
5. Basket	Which goods and services are included?	Mixing grocery, luxury, business and local baskets.
6. Date	What is the reference year and exchange-rate date?	Reusing an undated index as if it were current.
7. Sensitivity	Which assumptions change the answer?	Giving false precision from unstable estimates.

What the most expensive-country lists get wrong

The first error is false precision. A table that places Switzerland at 101.1 and Denmark at 82.0 may look scientific, but the numbers are meaningless unless the source, base city, basket, date and treatment of rent are disclosed. Official agencies often publish price-level indices with uncertainty and warn that small differences should not be interpreted as economically significant ranks.4

The second error is mixing countries, territories and cities. Bermuda, the Cayman Islands and other territories may appear in commercial lists, but their statistical coverage, tax structures and housing markets are not directly comparable with sovereign countries in an OECD or World Bank table. A city such as Zurich is not equivalent to Switzerland as a whole.

The third error is treating foreign-currency affordability as local affordability. A traveller paid in a strong currency may find a destination cheap while a resident paid in local wages struggles with rent and food. The relevant measure for residents is local purchasing power after taxes, not merely the exchange-rate conversion of a foreign salary.

The fourth error is ignoring public services. High taxes can finance services that reduce household purchases. Conversely, low taxes can coexist with high private education, healthcare, transport or childcare costs. A gross price list cannot determine which society provides the better material standard without distributional and public-service information.

The fifth error is using national data to describe a capital city. Housing, commuting, restaurant prices and international schools are often concentrated in major cities. A national index may include smaller towns and rural areas, lowering the average relative to the capital. For a relocation decision, city-level data are more relevant than a country headline.

Frequently asked questions

Which country has the highest cost of living?

There is no single answer because the result depends on the measure. In the OECD’s 2025 comparison of 2023 household-final-consumption price levels, Switzerland was roughly 50% above the OECD average. In Eurostat’s 2025 EU consumer price-level comparison, Denmark was 40% above the EU average. The EIU’s public 2023 city survey placed Singapore and Zurich jointly at the top of its city ranking.3 4 5

Is Switzerland the most expensive country in the world?

Switzerland is at the high end of OECD broad household price-level comparisons, but an OECD comparison is not a complete global ranking. Whether Switzerland is “the most expensive country” depends on whether the dataset includes territories, which year is used, how housing is measured and whether the basket is national or expatriate-focused.3

Is Singapore a country or a city in cost-of-living rankings?

Singapore is both a sovereign country and a city-state, so national and city geographies largely overlap. Nevertheless, the EIU survey cited here is a city index. Its result should not be used to claim that every national cost measure ranks Singapore first or that the experience of every household matches an expatriate basket.5 6

Why can a country be expensive but still have a high standard of living?

High wages, public services and productivity can offset high prices for many residents. The reverse is also possible: a country with low prices can be unaffordable for local households if incomes are very low or housing absorbs a large share of disposable income. The ILO’s real-wage framework and the OECD’s AIC concept show why prices must be interpreted with income and services.3 10

Is rent included in cost-of-living indexes?

Sometimes. The answer depends on the index. Eurostat’s household-final-consumption framework includes broad consumption categories, while an EIU city basket and a local housing-affordability analysis may apply different housing assumptions. Always read the methodology before comparing an index with your own rent.4 5 7

What is the difference between PPP and cost of living?

PPP is a statistical conversion rate built from comparable prices. A cost-of-living index is a result produced by applying a basket, weights and reference to prices. PPP can support a cost-of-living comparison, but it is not itself a monthly household budget.1 2

Are expensive countries bad places to live?

No. Price level and quality of life are different concepts. Expensive countries may offer higher wages, stronger public services, safety or infrastructure, while inexpensive countries may offer lower prices alongside lower wages, weaker services or limited housing. A location decision should compare the whole package rather than a price rank.3 7 10

Which category usually matters most for households?

Housing often dominates for renters and buyers, but the answer depends on household structure. Families may face childcare and education costs; commuters may face transport; older households may face healthcare and energy; remote workers may face different housing and connectivity costs. The OECD housing indicators and World Bank healthy-diet measures illustrate why one category can change the affordability conclusion.7 11

Conclusion

The countries and cities that appear at the high end of cost-of-living comparisons are not identified by one universal scoreboard. Switzerland stands out in OECD broad price-level data, Denmark led the EU’s 2025 consumer price-level comparison, and Singapore and Zurich topped the EIU’s public 2023 city survey. These results are informative only when their geography, basket, reference year and methodology remain visible.3 4 5

The more useful question is not simply “Where is most expensive?” It is “What does a defined household basket cost in a defined place, and how does that cost compare with local income, taxes, housing and public services?” PPPs help compare broad price levels. Housing ratios show whether property is affordable relative to income. Real-wage data show whether purchasing power is improving. Food-affordability data reveal whether households can afford a healthy diet. City indexes help with relocation, but they do not replace local household analysis.

A high-quality cost-of-living comparison therefore avoids unsupported global rankings and uses several complementary datasets. Prices describe the environment; wages and public services determine what residents can actually afford.

This is research and analysis only, not personalized financial advice.

Related Reading

• Countries with the Highest Homeownership Rates
• Countries with the Highest Income Inequality
• Countries with the Largest Economies by GDP
• Countries with the Most Billionaires
• Countries with the Best Work-Life Balance

References