The Cost of Living Survey from human resource consultancy, Mercer, covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including transport, food, clothing, household goods and entertainment.
Mercer also includes the cost of housing which it said is often the biggest expatriate expense and therefore plays an important part in determining where each city is ranked.
Making up the rest of the top five, following Tokyo and Luanda, is another Japanese city, Osaka as well as Moscow – the most expensive European city and Geneva in Switzerland.
At the other end of the scale is Karachi in Pakistan, deemed the cheapest city in which to live, followed by the Pakistani capital Islamabad.
In the UK meanwhile, London was deemed cheaper to live than last year, having dropped seven places to 25th position, while Birmingham is up 17 places to 133, overtaking Aberdeen at 148 and Glasgow at 161.
Mercer said recent world events, including economic upheavals, have affected the rankings for many regions through currency fluctuations, inflation and volatility in accommodation prices.
Nathalie Constantin-Métral, a principal at Mercer and responsible for compiling the ranking each year, said: “Deploying expatriate employees is becoming an increasingly important aspect of multinational companies’ business strategy, including expansion.
“But with volatile markets and stunted economic growth in many parts of the world, a keen eye on cost efficiency is essential, including on expatriate remuneration packages. Making sure salaries adequately reflect the difference in cost of living to the employee’s home country is important in order to attract and retain the right talent where companies need them.”
Top ten
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Mercer Cost of Living Survey – Worldwide Rankings 2012 (The Mercer international basket, including rental accommodation costs) |
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Rank as of March |
City |
Country |
|
|
2012 |
2011 |
||
|
1 |
2 |
Tokyo |
Japan |
|
2 |
1 |
Luanda |
Angola |
|
3 |
6 |
Osaka |
Japan |
|
4 |
4 |
Moscow |
Russia |
|
5 |
5 |
Geneva |
Switzerland |
|
6 |
7 |
Zurich |
Switzerland |
|
6 |
8 |
Singapore |
Singapore |
|
8 |
3 |
N’Djamena |
Chad |
|
9 |
9 |
Hong Kong |
Hong Kong |
|
10 |
11 |
Nagoya |
Japan |
Bottom ten
|
205 |
200 |
Tirana |
Albania |
|
205 |
208 |
Tegucigalpa |
Honduras |
|
207 |
200 |
Skopje |
Macedonia |
|
208 |
203 |
Kolkata |
India |
|
209 |
207 |
Tunis |
Tunisia |
|
210 |
212 |
La Paz |
Bolivia |
|
211 |
210 |
Bishkek |
Kyrgyzstan |
|
212 |
213 |
Managua |
Nicaragua |
|
213 |
209 |
Islamabad |
Pakistan |
|
214 |
214 |
Karachi |
Pakistan |
