Dublin is a more expensive place to live than Abu Dhabi or Silicon Valley thanks to a strengthening euro and inflation, a cost-of-living survey published on Tuesday shows.
A study by data specialist ECA International ranks Dublin as number 72 on its annual list of the world’s most expensive cities, the first time that the Irish capital has joined the top 100.
Dublin’s move up the ranks of the world’s most expensive cities means the cost of living there has overtaken that of Abu Dhabi, the oil-rich Gulf state, which is two places behind at number 74, and Silicon Valley, home to the world’s biggest tech companies at 73.
ECA said the survey excludes the capital’s rapidly increasing accommodation costs, and is instead based on prices paid for everyday things such as dairy products, meat, fish, vegetables, a pint of beer and services such as dry cleaning.
Main driver
Steven Kilfedder, the company's production manager, explained that the euro's strength against the dollar over the past year was the main driver of the increase.
“The cost of goods and services went up a little, about 1.6 per cent, which is more than official estimates, but the exchange rate is the biggest factor,” he said.
The euro’s strength drove up the cost of living across the EU countries that make up the euro zone. ECA noted that 18 European cities entered the top 100 rank for the first time this year.
Mr Kilfedder warned that the rise in the cost of living could hit the investment by US multinationals, on which Dublin has depended for much of its growth in recent years.
"The fact is that in Ireland, just as in the other euro zone countries, this is pushing up costs for some global companies, particularly those from the US," he said.
Mr Kilfedder explained that when such companies look at where to invest, they consider the cost of moving key staff to potential locations, along with other factors.
Worse off
He pointed that these businesses had to ensure that such workers were not worse off when they moved. As a result, once the euro strengthened against the dollar, it becomes more expensive to pay them.
Graeme McQueen, spokesman for Dublin Chamber of Commerce, said that surveys such as ECA’s emphasised the need for the city to maintain its competitiveness.
“There are external factors we can’t control, like exchange rates, but we should be concentrating on things we can control, including commercial rates and personal taxation,” he said.
ECA will publish an accommodation survey in coming weeks, according to Mr Kilfedder.
