Switzerland has lost its long-held title as the world’s most expensive country. But Iceland has reclaimed the top spot for the first time since 2018, with price levels now running 3% points above Switzerland’s.
Viska, an Icelandic white-collar trade union, used data from Eurostat and the Icelandic central bank to find that Iceland’s post-pandemic travel boom turbocharged the economy but also stoked inflation across housing, services, and food.
The main culprit is tourism.
Food prices in Iceland now exceed those in other Nordic nations (themselves among the world’s priciest) by 44%. Dairy and eggs cost 75% more than the Nordic average, and meat costs 71% more.
Vilhjalmur Hilmarsson, an economist at the white-collar union Viska Union, linked the surge directly to the pressure that mass tourism placed on an economy of just 370,000 people while speaking to Bloomberg.
Another big component is housing which has been directly affected by tourism. Tourists are competing with inhabitants for housing through AirBnB for instance, said the Viska Economist
It is worth noting a data nuance: the Eurostat figures for 2024, the latest comparable dataset available, still show Switzerland topping Iceland by more than seven percentage points on a purchasing-power-adjusted basis. The new Viska calculation uses more current Icelandic central bank data alongside Eurostat, suggesting Switzerland’s lead has not only evaporated but reversed when the most recent price movements are factored in.
However, Hilmarsson added that “in the long run, Iceland is not building up productive sectors.”
“We depend way too much on labour-intensive industries which will continuously create inflationary pressure. We need to foster more pillars,” he added.
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Zürich Dethroned: Hong Kong Now World’s Most Expensive City
It is a double blow for Switzerland: Zürich has also lost its crown as the world’s most expensive city to Hong Kong.
Zürich, which has topped or shared the top position in the Economist Intelligence Unit’s Worldwide Cost of Living index for several consecutive years, has been overtaken by Hong Kong.
The Asian financial hub’s resurgent property market and elevated service costs have pushed it back above Zürich in the most recent rankings. For a city that has long worn its expense as a mark of quality and stability, the shift is notable, even if residents paying CHF 3,000 a month in rent are unlikely to feel any relief.
But, different studies may produce different results. According to this one, Zurich remains the most expensive city in the world in 2026 too.
These are the top 15 most expensive cities to live in the world, 2026:
1. 🇨🇭 Zurich, Switzerland
2. 🇨🇭 Geneva, Switzerland
3. 🇨🇭 Basel, Switzerland
4. 🇨🇭 Lausanne, Switzerland
5. 🇨🇭 Lugano, Switzerland
6. 🇨🇭 Bern, Switzerland
7. 🇺🇸 New York City, United States
8. 🇮🇸 Reykjavik,…— Global Index (@TheGlobal_Index) May 25, 2026
However, the comparisons tell different stories depending on whether you measure countries or cities. Switzerland may no longer be at the very top in either ranking, but it still remains the reference point for high prices in Europe
Does It Change The Day-To-Day Reality?
Switzerland remains one of the most expensive places on earth to live, work and raise a family. A single person in Zürich faces monthly costs excluding, while a family of four in the city can expect to spend upward of CHF 5,000 a month on basic outgoings before housing.
The real significance for Switzerland is reputational and political. The country has long used the “world’s most expensive” label as a shorthand for broader discussions about wages, purchasing power and competitiveness.
Losing that distinction to both Iceland nationally and Hong Kong at city level gives policymakers and employers one less argument to resist wage growth, though Swiss health premiums, rents and childcare costs continue to rise regardless of where either country sits in a global league table.
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