Ireland is likely to remain competitive on costs and a highly attractive investment destination for foreign multinationals despite Dublin being ranked as one of the most expensive places to live globally in a new survey.
The capital now ranks as the 19th most expensive city in which to live, according to London-based think-tank the Economist Intelligence Unit (EIU).
The EIU’s latest annual worldwide cost of living report shows Dublin rose six places in the past 12 months, making it a more expensive location than the likes of Milan, Rome, Barcelona, Madrid, Berlin, Washington DC and London.
The survey’s cost measurements range from household and consumer goods to transport/ infrastructure costs and utility prices. They don’t include tax, insurance or accommodation prices.
“In the last year, recovering demand and robust growth have provided Europe with a positive outlook. A strong euro has driven up the relative cost of living in not just Dublin, but all eurozone cities measured in the survey,” said EIU urban data researcher Nikita Sisaudia.
“Consequently, the relative costs for nine out of 10 expenditure categories included in the survey have increased in Dublin over the last year. This has resulted in a move up the rankings for Dublin, even as consumer price inflation in Ireland remains low,” she said.
The IDA, however, said Ireland remains attractive and competitive. An IDA spokesperson noted that inflation in Ireland has remained below the eurozone average since 2008, “making Ireland more cost competitive relative to other euro area countries”.
“This is reflected in global competitiveness reports, which rank Ireland among the top countries in the world in which to do business. Ireland’s rapid recovery has led to some challenges in the housing and rental market; however, increasing the supply of homes to buy and rent is a key priority area for the Government under the Rebuilding Ireland action plan,” they said.
The Brexit-related weakening of sterling resulted in UK cities falling down the league table. London is now ranked the 30th most expensive city in which to live, with the EIU putting it 9% cheaper than Dublin and 30% cheaper than Paris. However, the benefits of that are only really being felt by tourists. British citizens will continue to feel the pinch as retailers pass on import cost rises through higher prices.
“Intense competition among British retailers, accompanied by low oil and commodity prices, has kept significant rises in check over the last few years.
“But now rising import prices mean that British shoppers will notice higher levels of inflation, even as businesses potentially benefit from inbound retail tourism and cross-border trade,” said the report’s author Roxana Slavcheva.
Recent figures from the American Chamber of Commerce Ireland showed US investment in Ireland as having hit record levels of $387bn last year. US investment flow into the UK fell by over 50%, but rose by nearly 4% into Ireland. “Ireland needs Dublin to be a city of global importance and Dublin needs investment in its infrastructure. Balanced regional development is key to a sustainable capital and a sustainable Ireland. These are not competing interests, Ireland is a small place, we all rise and fall together,” said Chamber president Barry O’Sullivan.