Island Nations Are Latam’s Most Expensive: Study

Island nations are the most expensive places in Latin America and the Caribbean, according to the 2026 Cost of Living Index published by Numbeo.

Across the Americas, the British Overseas Territories of Bermuda and the Cayman Islands rank as the most expensive. Bermuda posts an index score of 135.75, while the Cayman Islands follow at 115.56. An index reading of 120 indicates that a location is 20% more expensive than New York, excluding rent.

Other Caribbean territories also feature prominently, including Bahamas (98.82), Grenada (76.44) and Puerto Rico (62.58).

Analysts say island countries are seeing living costs driving up because they are heavily dependent on imports. In addition, their infrastructure costs are high, and often operate in small markets with limited competition. Local taxes, import duties and airport fees further raise prices. A strong focus on luxury tourism also pushes up the “average” cost of goods and services.

In South America, Uruguay ranks as the most expensive country, with an index of 55.58. Its purchasing power index of 55.14 suggests residents can buy nearly 45% fewer goods and services than New Yorkers with average incomes. By contrast, Venezuela shows a purchasing power index of 17.44, reflecting sharply weaker consumer capacity.

While countries such as Chile and Peru have stabilized inflation near central bank targets, pressures persist in Mexico and Colombia. In Colombia, analysts recently raised their 2026 inflation forecast following a sharp minimum wage increase.

Regional inflation rates range from deflation in Costa Rica (-2.54% year-on-year) to triple-digit estimates in Venezuela, underscoring stark economic contrasts across the region.