Cheaper to live in India than US, UK and Germany: SBI report
Although there has been a multiple jump in the cost of living across countries in the aftermath of the pandemic and the Ukraine-Russian war, with food and energy prices going up, India is still doing much better compared to the countries it is supposed to set an example of. Sound macro management, according to the Economic Research Report of the State Bank of India ‘Ecowrap’.
The cost of living in the common currency/rupee in India versus the US, UK and Germany showed the smallest increase since September 2021, according to an analysis by the bank’s Economic Research Division (ERD).
To understand how India performs in terms of cost of living in a common currency, ERD compares cost of living in India with the US, UK and Germany by adjusting each country’s exchange rate (dollar, euro and pound in our case) to achieve parity with the rupee, by allowing movements of these currencies against the rupee , then using these converted numbers to arrive at a similar cost of living across these countries in terms of just rupees.
The ERD found that in terms of rupees, if the household budget/cost of living was 100 rupees in September 2021 in all countries, it has now increased by 12 rupees in both the US and India, but has increased by 20 rupees in Germany and 23 rupees in the UK .
In terms of food price increase, India is the best performer. What cost 100 rupees in September 2021 across countries has now gone up by 25 rupees in the US, 18 rupees in the UK, 33 rupees in Germany and 15 rupees in India. ·
In terms of the increase in housing prices, India again performs best. The cost of 100 rupees in September 2021 across countries has now risen by 21 rupees in the US, 30 rupees in the UK, 21 rupees in Germany and 6 rupees in India, said Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.
He added that in terms of energy price increase, the cost of 100 rupees in September 2021 across countries, has now increased by 12 rupees in the US, 93 rupees in the UK, 62 rupees in Germany and 16 rupees in India.
With the global economy continuing to be wracked by uncertainties, India appears to be doing quite well in managing the cost of living as compared to other countries.
As the International Monetary Fund recently pointed out, there has been a multiple jump in the cost of living across countries, with food and energy prices skyrocketing.
“With central banks across countries in the midst of a rate hike cycle, the cost of owning a home in the respective countries has also jumped manifold,” Ghosh said.
However, the good thing is that India still stands as an oasis in this age of uncertainty.
The ERD notes that as the global economy continues to be ravaged by uncertainty, India appears to be doing well in managing the cost of living compared to other countries.