Just a day after Norway topped an international prosperity index, the country’s capital has landed far down a list of cities around the world in terms of purchasing power. The world’s highest prices are to blame.
The ranking, conducted by the large Swiss bank UBS, measured purchasing power in several cities and Oslo landed in 26th place, behind such cities as London, Brussels, Copenhagen and Stockholm, also known for being expensive.
Oslo was listed as having as the fourth-highest average hourly wages, but the world’s highest prices for what UBS called “a broad basket of goods and services.” Zurich and Geneva followed Oslo as the world’s next most-expensive cities.
The lowest prices were found in Mumbai (Bombay), Manila and Bucharest.
Even though Zurich was among the most expensive cities, high hourly after-tax wages still placed it as having among the world’s highest degree of purchasing power, whereas Oslo came out poorly.
Steinar Juel, chief economist at large Nordic bank Nordea in Oslo, told Norwegian Broadcasting (NRK) that he was somewhat surprised Oslo ranked so low in purchasing power. The UBS study was published just a day after a London think-tank ranked Norway as having the highest level of prosperity in the world.
Juel noted, however, that a lower portion of the Norwegian economy is generated by private consumption than in other countries, and that tourists to Norway often complain of high prices in Oslo and elsewhere in the country. He thinks local purchasing power will rise, because of Norway’s strong economy.
Oslo Mayor Fabian Stang was clearly disappointed that his city ranked so low in terms of purchasing power. “I must say that I don’t like being in 26th place,” Stang told NRK. “It’s probably because Norway has a relatively high tax pressure, so disposable income is limited and we therefore don’t have as much purchasing power.”