Saturday, March 29, 2008

Bad news: Barcelona 20; Madrid 24



This was the "score" that made headlines here last week, but it wasn't soccer results -- it was about how expensive the two major Spanish cities have become. So, "Barcelona, tan cara como Nueva York" ("Barcelona, as expensive as New York") screamed the front page of Barcelona's La Vanguardia newspaper on March 19th.
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Sure enough, according to the latest "Prices and Earnings: comparison of purchasing power around the globe" report by the Swiss banking firm UBS, Barcelona is the 20th most expensive city in the world, while New York City is 18th. Madrid comes in at number 24. (FYI, the 5 most expensive cities according to USB are Oslo, Copenhagen, London, Dublin and Zurich -- in that order.)
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However, looking a little closer at the data, one can see that this first list, referred to as the "Prices" list has two columns -- one including rent costs and the other not. Therefore, according to UBS, Barcelona is the 20th most expensive city in the world for visitors, and Madrid number 24, etc.
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For a look at the cost of living in a city, one needs to look at the second column, which includes rent costs. Here Barcelona is ranked as the 26th most expensive city to live in, Madrid number 22 and New York City number 5. So, saying Barcelona is as expensive as New York city could be considered stretching things a bit -- but it certainly isn't cheap anymore! (By the way, according to this list, the most expensive city to live in is London followed by Oslo, Dublin and Copenhagen.)

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Another list in the report is called, "Domestic purchasing power including rent prices." Here Barcelona is ranked number 24, Madrid goes down to 30 and New York comes in at number 22. (The five most expensive cities in this grouping are Copenhagen, Zurich, Berlin, Geneva and Frankfurt.)
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Here are a few interesting quotes from the report:

  • "The euro has continued its extraordinary ascent."

  • "...Eurozone cities are even more expensive."

  • "In 2006, Barcelona and Hong Kong were similarly costly. Now the Catalonian port city is 22% more expensive than the Chinese one."

Well, it seems from this report that Europe is the most expensive part of the world to live in today. As for the Euro, I have definitely seen a substantial increase in the cost of living since it was introduced in 2001. And I can personally attest to how much more it costs me to live in Barcelona than it did in previous years.
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In 2005 someone on a forum about life in Spain asked me how much I usually spent on groceries and sundries. Since I keep my supermarket receipts that was easy for me to answer -- at the time it was typically between 120 and 130 euros a month. Looking at current receipts, I can say that today I regularly spend between 165 and 175 a month.
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I need to mention that I am single and relatively frugal. Certainly there are single people who spend less than me on groceries and such, but there are probably many more who spend a greater amount than I do to eat each month.
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In closing, let me mention another report that made the news this week:
Personal Income and the Risk of Poverty in Catalonia by IDES-CAT, the Statistical Institute of Catalonia. According to this study, 19% of the Catalan population falls beneath the poverty threshold. This means that 19 out of every 100 people living in Catalonia live on less than 689 euros a month!
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While I know many "mileruistas" who struggle by on about 1,000 euros a month, it must be incredibly difficult to get by on less than 689 -- especially on one's own. Sharing an apartment would be a must on such an income. Indeed, it is for many people above the poverty level.
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IDES-CAT also reported the following:

  • 30% of people surveyed reported that they had difficulty making ends meet each month;
  • only 4 out of ten persons surveyed stated that they had NO difficulty making ends meet;
  • income is 22.3% lower in households headed by women;
  • households that suffer the most economically are those made up of foreigners and those with divorced or separated heads of households;

And on that cheery note, I need to head out to do my weekly marketing.
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Chao amig@s,
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Carloz

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