A report on the Yahoo Finance blog “Your Insurance” notes that the five most expensive countries to live in Latin America are Venezuela, Brazil, Uruguay, Costa Rica and Chile.
The report was based on The Economist’s Big Mac Index and states that “living in Costa Rica may seem ideal until you analyze costs.” The country has a Consumer Price Index (CPI) of 68.43, ranking fourth in Latin America.
Venezuela tops the ranking with the highest CPI in the region at 103.49. The South American country also has the highest inflation rate at 28 percent in 2011.
Brazil came in second with a CPI of 83.71, and two of its major cities, São Paulo and Rio de Janeiro are among the top 20 most expensive cities in the world, the publication said.
Uruguay ranks third with a CPI of 82.95, and experts say the country made the top three due to its public agencies “that are too big, expensive and inefficient.”
Chile, according to many economists has the healthiest economy in Latin America, but at the same time is a very expensive country where people struggle, with a CPI of 67.39.
Besides high housing costs, rent and food, Chile has the most expensive education in the region.
The publication claims that although these countries are the most expensive, they have high wages, low levels of corruption and stable democracies, which also make them ideal places to live.
The Economist created the Big Mac Index in 1986 as a lighthearted guide to whether currencies are at their “correct” levels. It is based on the theory of purchasing-power parity, the notion that in the long run exchange rates should move towards the rate that would equalize the prices of an identical basket of goods and services (in this case, a Big Mac burger) in any two countries. The magazine publishes its index twice a year.