What Makes These Nations the Costliest Countries To Live In? A Data-Driven Breakdown

When evaluating where to settle globally, the picture becomes far more complex than simply comparing headline figures. While the United States ranks as expensive by many standards, approximately 50 other costliest countries in the world present their own unique economic challenges. Some appear budget-friendly on the surface yet drain wallets through hidden expenses—excessive taxation, depressed wages, or inflated transportation fees can offset any apparent savings on rent or groceries.

Understanding true affordability requires examining multiple dimensions: the overall living expense score, local purchasing power (what your income can actually buy), and category-specific costs. GOBankingRates conducted a comprehensive global analysis, cross-referencing 131 nations across these metrics using data from Numbeo as of July 2022.

The Purchasing Power Paradox: Why Some Nations Seem Expensive

Switzerland emerges as the costliest country designation holder with a living expense score of 114.2. Though rent runs approximately $1,633.64 monthly, the real burden stems from income taxation reaching 40% and property taxes on residential homes. Swiss residents, however, gain 12.1% greater purchasing power than New Yorkers—partially offsetting costs.

Singapore follows closely (index: 85.9) with $3,016 monthly rent, yet sits only 14% above U.S. living costs. Its strong purchasing power of 95.6 means income stretches further.

Qatar, while projecting luxury, maintains a living expense score of 59.5 and rent averaging $1,429 monthly. The advantage: grocery costs run 24% cheaper than the U.S., and absent personal income tax structures.

Where Hidden Expenses Create Surprise Burdens

Iceland (index: 83.3) deceives many observers. Rental accommodation costs just $1,438 monthly, but groceries command 20% premiums—that’s where budgets truly fracture.

Lebanon presents perhaps the starkest purchasing power collapse: while living costs are merely 6% below U.S. levels, locals possess purchasing power representing only 7.3% of American standards. Rent at $558.74 masks deeper economic dysfunction.

Netherlands carries a 68.6 index score, appearing only 4% pricier than America. Reality? Personal income taxation reaches 49.5%, making it far more expensive than headline figures suggest.

Geographic Clusters: European, Asian, and Emerging Market Patterns

Nordic Region: Sweden (62.9 index, 32% income tax), Finland (67.5 index, $799.76 rent), and Denmark (78.6 index) all feature robust purchasing power but substantial taxation.

Mediterranean: Greece (54.6 index, $419.37 rent) and Portugal (45.3 index) appear affordable until confronting 44-48% income tax rates. Italy (61.3 index) and France (68.7 index) similarly balance lower rents with higher groceries and healthcare expenses.

Asia-Pacific: Japan’s 64.6 index delivers cheaper rent than the U.S. with 5% grocery savings, though healthcare costs 12% more. South Korea (70.4 index) offers particularly affordable housing at $417.17 monthly despite slightly elevated overall costs.

Emerging Economies: Venezuela (41.6 index), Belarus (35.4 index), and Russia (40.8 index) feature dramatically reduced living expenses—housing as low as $354 monthly—but catastrophically depressed purchasing power limits real advantages. Nicaragua, Guatemala, and Jordan similarly present misleading affordability metrics due to low wage environments.

The Formula Behind Ranking: What Determines True Expensiveness

The analysis weighted five factors: overall living expense index (doubled), average rent (doubled), grocery costs, healthcare quality, and local purchasing power. Nations ranking high among costliest countries typically shared patterns:

• High taxation: Switzerland, Greece, Netherlands, and Austria all impose 40%+ income tax rates
• Strong rent premiums: Singapore ($3,016), Qatar ($1,429), Switzerland ($1,633)
• Weak purchasing power despite lower nominal costs: Lebanon, Venezuela, and Nigeria
• Balanced burden: Australia, Germany, and Luxembourg maintain moderate expense indices alongside reasonable purchasing power

Notable Distinctions: Expense vs. Affordability

Australia (75.3 index) ranks among the world’s costliest countries yet provides 110.9 purchasing power—5% below U.S. standards but among the highest globally.

United Arab Emirates costs almost 12% less than America overall (60.3 index) with 25% cheaper groceries and zero personal income tax, making it counterintuitively affordable despite “expensive” classification.

Canada maintains 66.1 living expense score but only 102.1 purchasing power—roughly 13% weaker than the U.S., meaning Canadians struggle to afford the same lifestyle despite comparable headline costs.

The Bottom Line: Context Determines True Cost

Designating any nation the costliest country requires nuance. Singapore, Switzerland, and Iceland top expense indices, yet emerging economies like Russia and Venezuela technically register as “expensive” while offering dramatically lower absolute prices—just with minimal earning potential.

For digital nomads, remote workers, and relocators, the crucial calculation combines living expense index, expected local salary, and purchasing power simultaneously. A nation’s ranking among costliest countries reflects only part of the equation; understanding why it’s expensive reveals whether your circumstances make it genuinely unaffordable.