Moscow tops list as most expensive city

2008

If the credit crunch has caught up with you and the cost of living is getting too much, Asunción in Paraguay might be just the place to head to for a few years. But whatever you so, stay away from Moscow, Tokyo or London.

That's because Moscow has retained the dubious title as the world's most expensive city for expatriates for the third year running, with the average cost of a humble cup of coffee topping an eye-watering $10. Tokyo, meanwhile, has overtaken London into second place.

In contrast, Asunción in Paraguay is the least expensive city to live, emerging from the latest annual Cost of Living Survey from HR consultants Mercer as being almost three times cheaper than the Russian capital.

The survey examined 143 cities across six continents, measuring the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

With New York as the base city scoring 100 points, Moscow scores 142.4, close to three times costlier than Asunción, which has an index of just 52.5.

The weakening of US dollar had had a significant impact on the rankings, Mercer said, with New York now the only North American city to feature in this year's top 50 in 22nd place – a drop of seven places over the past 12 months.

European and Asian cities dominate the top 10, with Oslo jumping six places to rank 4th. Seoul follows in 5th place and Hong Kong closely after in 6th.

Other European cities in the global Top 10 include Copenhagen at 7th, Geneva in 8th, Zurich in 9th and Milan in 10th place.

Sofia in Bulgaria is again the least expensive European city for expatriates in 97th place.

"Although the traditionally expensive cities of Western Europe and Asia still feature in the top 20, cities in Eastern Europe, Brazil and India are creeping up the list. Conversely, some locations such as Stockholm and New York now appear less costly by comparison," said Said Mercer's Yvonne Traber.

"Our research confirms the global trend in price increases for certain foodstuffs and petrol, though the rise is not consistent in all locations. This is partly balanced by decreasing prices for certain commodities such as electronic and electrical goods. We attribute this to cheaper imports from developing countries, especially China, and to advances in technology."

She added that keeping on top of the changes in expatriate cost of living is essential if companies are to ensure that their employees are compensated fairly and at when sent abroad.

"In some cases, cost of living increases may be correlated to countries with a high rate of economic growth. Companies may assign high priority to expansion in these economies but may have to deal with inflationary pressures due to competition for expatriate-level housing and other services, as observed in our surveys," she added.

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