These rankings measure the comparative cost of over 200 items, including housing, transportation, food, clothing, household goods, and entertainment. New York is used as the base city, comparing 214 cities against it.
TOP 50 CITIES WITH HIGHEST COST OF LIVING
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Ranking as of
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In Mercer’s Global Cost of Living Rankings 2014 two African cities, not known as wealthy locales top the list of most expensive cities for expats to live. Luanda in Angola is the world’s most expensive city for the second year in a row followed by N’Djamena, Chad and their high costs for expats is because in places where a significant percentage of the local population lives under the poverty line, adequate accommodation, security measures, and imported consumer goods are all luxuries, which cost - a lot.
Less surprisingly, three Swiss cities – Zürich (5), Geneva (6) and Bern (8) - make the top 10, as do three Asian cities with costly reputations – Hong Kong (3), Singapore (4) and Tokyo (7).
Shanghai (10) became the first city in mainland China to make the top 10, due largely to the strength of the yuan. Currency fluctuations impact on inflation, goods and services: making many African, European and Asian cities more expensive for expats.
This cuts both ways, however and both Tokyo (7 from 3) and Moscow (9 from 2) became slightly less expensive, as both the yen and ruble are weaker than they were last year.
Large increases in both accommodation cost and demand, coupled with strong local currencies saw several cities soar up the list, including Dhaka and Nairobi (joint 117th last year) and Dubai (67) who jumped to 37, 30 and 23, respectively.
Both London (12 from 25) and Paris (27 from 37) got significantly more expensive since last year, while expats in all ranked Australian cities saw their Australian dollars stretch a lot further.
Ed Hannibal, partner and global leader for Mercer’s Mobility practice says rankings in many regions were affected by recent world events, “including economic and political upheavals, which resulted in currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices.”
In the Americas, Canadian cities dropped in the rankings as the Canadian dollar weakened against the US dollar, while US cities climbed the rankings due to the relative stability of the US dollar against other major currencies
Western European cities have all risen in the rankings mainly due to the strengthening of local currencies against the US dollar, with UK and Germany experiencing some the biggest surges in the ranking. Most cities in Eastern and Central Europe, however, saw a drop in ranking as a result of local currencies depreciating against the US dollar.
In the Middle East, Tel Aviv (18) is the most expensive city, followed by Beirut (63), Dubai (67) and Abu Dhabi (68).
In Asia, Japanese cities have dropped in the ranking this year as a result of the yen’s weakening against the US dollar, while Chinese cities jumped in the due to the strengthening of the Chinese yuan.
Karachi (211) in Pakistan is the least expensive city for expats and several Indian cities also feature low in the rankings.
- CNN Cost of Living Calculator
- International Labour Organization (ILO) Resolution Concerning Consumer Price Indices, December 2003
- Mercer index
- Mercer’s Global Cost of Living Rankings 2014
- OECD: Definition of Consumer Price Index
- OECD: Definition of Cost of Living Index
- OECD: Definition of Purchasing Power Parity
- OECD iLibrary: Organisation for Economic Co-operation and Development
- US Bureau of Labor Statistics Consumer Price Index