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Though there has been a manifold jump in the cost of living across countries in the aftermath of the pandemic and the Ukraine-Russia war, with food and energy prices going through the roof, India still performs significantly better compared with countries supposed to be the epitome of sound macro management, according to State Bank of India’s economic research report ‘Ecowrap’.
The cost of living in common currency/ Rupee in India vis-a-vis the US, the UK and Germany has shown the least increase since September 2021, according to an analysis by the bank’s economic research department (ERD).
To understand how India has performed in terms of cost of living in a common currency, the ERD compared 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 for these currencies’ movements against the rupee, and then using such converted numbers to arrive at a comparable cost of living across these countries in rupee terms only.
The ERD found that in rupee terms, if the household budget/ cost of living was Rs 100 in September 2021 across all countries, it has now increased by Rs 12 in both the US and India, but it has increased by Rs 20 in Germany and Rs 23 in the UK.
“In terms of increase in food prices, India performs the best. What cost Rs 100 in September 2021 across countries, now is up by Rs 25 in the US, Rs 18 in the UK, Rs 33 in Germany and Rs 15 in India. ·
“In terms of increase in shelter prices, India again performs the best. What cost Rs 100 in September 2021 across countries, is now up by Rs 21 in the US, Rs 30 in the UK, Rs 21 in Germany and Rs 6 in India,” Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI, said.
In terms of an increase in energy prices, what cost Rs 100 in September 2021 across countries, is now up by Rs 12 in US, a staggering Rs 93 in the UK and Rs 62 in Germany and Rs 16 in India, he added.
As the global economy continues to ravage through uncertainties, it thus seems that India has done quite well in managing the cost of living in comparison with other countries.
“As the IMF pointed out recently, there has been a manifold jump in cost of living across countries, with food and energy prices going through the roof.
“With central banks across countries in the midst of a rate hike cycle, the cost of owning a house in the respective countries has also jumped manifold,” Ghosh said.
However, the good thing is that India still stands like an oasis in this era of uncertainty.
The ERD noted that as the global economy continues to ravage through uncertainties, it seems that India has done quite well in managing the cost of living in comparison with other countries.
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