Bahrain’s capital Manama broke into the top 10 globally this year in the UBS Global Wealth Management’s purchase power index. Los Angeles boasts the world’s best buying power for the average worker’s salary.

The index is part of UBS' Prices and Earnings study that covers 77 cities across the globe. For each city it measures how much people earn and how much the items in their average shopping basket costs, and compares the two to come up with the purchasing power index. Put simply, it's a ranking of earnings versus prices. The higher the city is in the ranking, the more people in that city can afford.

Manama rises from its 17th rank in the purchase power index of 2015.

Another Middle Eastern powerhouse, Dubai has been placed at 14, having risen 12 spots since UBS’ 2015 ranking. While it's one of the most expensive expat destinations, it's pretty affordable when it comes to millennial must-haves, said UBS's Prices & Earnings report. Qatar's capital Doha also rose from its 37th rank in 2015 to 19th position in 2018.

Global financial capitals New York and London rank 10th and 23rd respectively. Zurich has retained its position as the most expensive city, followed by Geneva and Oslo. 

The study, first launched in 1971 and now in its 17th edition, compares 128 prices of various goods and services as well as average earnings of 15 professions representing the average working population.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said: "Purchasing power matters to all of us as individuals and as investors. Whether you are planning your next vacation or trying to understand long-term shifts in economic power, our study provides a detailed analysis of prices around the world."

According to the study’s Purchasing Power Index, residents of European and North American cities typically enjoy the best buying power overall, with Manama and Hong Kong the only non-transatlantic contenders in the Top Ten.

Daniel Kalt, chief economist and chief investment officer for Switzerland, UBS Global Wealth Management, and lead editor of the study, said: "As in our previous edition, Zurich tops the list as the world’s most expensive city, closely followed by Swiss rival Geneva. However, our Purchasing Power Index clearly indicates that we are beginning to see stronger competition from overseas with only three European cities left in our Top Ten, all of which lost ground compared to the report’s 2015 edition."

By isolating just one of the 128 prices analysed, global purchasing power differences become clearly visible. For example, a standard haircut for women costs $94.32 in Zurich (Switzerland), compared to $22.60 in Kiev (Ukraine), $12.17 in Mexico City and $7.50 in Cairo (Egypt).

However, while a woman in Zurich typically only has to work 3.05 hours to afford this service, the same expenditure requires 12.09 hours of work in Kiev, 5.86 hours in Mexico City and 6.11 hours in Cairo. – TradeArabia News Service