Which countries have the highest price levels? What World Bank and ICP data show

How we ranked economies by overall price level

Purchasing power parity is, in Wikipedia's words, an economic term for measuring prices at different locations. A PPP conversion factor says how many units of local currency buy what one US dollar buys in the United States. Dividing it by the official exchange rate gives the price level ratio: 1.00 means the same general price level as the United States, and 1.16 means about 16 per cent higher.

We took the World Bank's GDP PPP conversion factor and official exchange rate for 2021 and 2023 and divided one by the other. 2021 is the year of the latest full ICP benchmark, in which prices were collected and compared across economies, with results released in May 2024. 2023 is a later estimate. Our own selection rule: we list sovereign economies and a few well-known territories, and we flag any value that looks like an exchange-rate artefact.

Wikipedia describes non-traded goods such as housing and services as priced locally and says PPP is poor for measuring the relative cost of goods and services in international markets. This ratio covers everything an economy produces, including construction, public services and wages, and it is not a shopping basket for an expatriate.

The highest ratios in 2021, and what happened by 2023

The table lists the highest values for 2021, leaving out Lebanon, Iran and a few very small Pacific states, and adds the 2023 estimate. Among the sovereign economies, Switzerland has the highest ratio apart from Lebanon and Iran, at 1.16. Israel (1.13), Iceland (1.12), Australia and Norway (1.05) and New Zealand (1.04) follow, with Denmark at 1.00 and Luxembourg and Sweden just below.

By 2023 the picture had shifted. Switzerland stayed above the United States at 1.11, and Iceland reached 1.00, but Norway had fallen to 0.84, Australia to 0.89 and Denmark to 0.88. Because the ratio is built on market exchange rates, currency movements against the US dollar feed straight into it, which shows why a single year can mislead.

Two outliers need an explicit warning. Lebanon shows 2.72 in 2021 and 1.71 in 2023, and Iran shows 1.20 in 2021 and 2.24 in 2023. Both are far out of line with other economies and depend heavily on the official exchange rate used, so we do not treat them as the priciest places to live.

Switzerland and the Nordic countries: high prices, small populations

Switzerland has about 9.15 million people and four official languages: German, French, Italian and Romansh. It has no de jure capital, with Bern as the federal city and seat of government, and 26 cantons. Most visitors meet it through Zurich or Geneva; for longer visits, long-stay apartments in Zurich show how the format works.

Iceland has 394,324 people, Icelandic as its official language and Reykjavik as its capital, home to about 35 per cent of residents. The Gulf Stream keeps its climate temperate despite a location just south of the Arctic Circle. Norway has about 5.6 million people, Norwegian and Sami as official languages, Oslo as capital and largest city, and membership of the European Economic Area and the Schengen Area. Denmark has about 6 million people and Copenhagen as capital and largest city. See Reykjavik, apartments with a kitchen in Oslo and Copenhagen.

Iceland, Norway, Switzerland and Denmark also occupy the top four places on the UN's 2025 HDI list, which uses 2023 data, so a high price level here sits alongside high human development scores. The two measures are separate.

Luxembourg, Australia and New Zealand: three different high-price cases

Luxembourg is a unitary parliamentary constitutional monarchy of about 696,000 people with Luxembourgish as its official language and French and German also recognised. Wikipedia says that foreign nationals account for almost half the population. It covers only about 2,586 square kilometres. See Luxembourg.

Australia has about 27.8 million people and ranked 7th on the HDI. Its ratio is 1.05 in 2021 and 0.89 in 2023, a fall in the series. Compare Australia and New Zealand, where the ratio was 1.04 and 0.90.

None of these figures says what a month in Sydney or Auckland will cost. For that, look at specific listings and the extras on top of the rate: aparthotel extra charges and city taxes explains typical add-ons.

What a high ranking does not mean for someone planning a stay

A country can be expensive overall and still have affordable pockets, and a cheap country can have expensive neighbourhoods. The ratio will not tell you which. It also cannot tell you whether a given price is matched by local incomes.

Currency is the second caution. A visitor from the United States, the euro area or the United Kingdom will see a different gap than the ratio suggests, because exchange rates move quickly. The 2021 to 2023 changes above are a reminder.

If you are budgeting a long stay, compare accommodation formats rather than countries: a kitchen lets you cook some of your own meals, and a monthly rate can differ from a nightly one. See monthly serviced apartments and the companion best countries to live in Europe.

• Compare cities, not national averages.
• Check which year a ranking uses and how exchange rates moved since.
• Treat Lebanon and Iran values as unreliable for this purpose.
• Ask what is included in a rate before comparing it.