Luanda tops the world's 20 most expensive cities for expats
London remains the 12th most expensive city
Consultancy firm Mercer unveiled on Wednesday its 21st annual Cost of Living Survey, containing the list of the world's most expensive cities for expatriates.
Oil-rich Luanda, Angola's capital city, remains the world's most expensive city for expats for a third year in a row. The cost of imported goods and safe living conditions in this country explain its first position in the ranking. The country's economy is heavily driven by the oil sector, which contributes to 50% of the country's GDP, which reached $175.5bn in 2014, and 90% of Angola's exports. Diamonds also contribute to 5% of its exports.
Five of the top 10 cities were located in Asia, with Hong Kong holding the second position as a result of its currency pegged to the US dollar which drives up the cost of living locally.
Singapore ranked fourth, Shangai sixth, Beijing seventh and Seoul eighth. Tokyo dropped four places in the ranking to the eleventh position.
"Chinese cities jumped in the ranking due to the strengthening of the Chinese yuan along with the high costs of expatriate consumer goods, ”explained Nathalie Constantin-Métral, Principal at Mercer.
The African continent also saw two other of its oil-rich capital cities slip into the top spots, with Chad's capital city N’Djamena falling from second to tenth position, and Kinshasa, capital of the Democratic Republic of Congo climbing to the 13th position from the 20th spot.
Zurich, Geneva and London were the only three European cities in the top-20, which can be explained by the weakening of European currencies against the dollar.
“Despite moderate price increases in most of the European cities, European currencies have weakened against the US dollar which pushed most Western European cities down in the ranking,” said Constantin-Métral..
“Additionally, other factors like the Eurozone’s economy, falling interest rates, and increasing unemployment have impacted these cities.”
New York remained the world's 16th most expensive city for foreigners living there.
The biggest surprise was Buenos Aires, Argentina's capital, which managed to climb more than 67 spots as a result of strong price increases for goods and services.
The survey found that factors including instability in housing markets and inflation in goods and services impacted significantly on the overall cost of doing business in a global environment.
“As the global economy has become increasingly interconnected, close to 75% of multinational organizations are expecting long-term expatriate assignments to remain stable or increase over the next two years to address business needs,” said Ilya Bonic, Senior Partner and President of Mercer’s Talent business.
Sending employees abroad is necessary to compete in markets and for critical talent
“Sending employees abroad is necessary to compete in markets and for critical talent, and employers need a reliable and accurate reflection of the cost to their bottom line,” she added.
On the other side of the coin, the survey found that the world’s least expensive cities for expatriates were Bishkek, the capital and the largest city in the Central Asian country of Kyrgyzstan, Namibia's capital Windhoek and Pakistan´s Karachi.
Here is the full list of the 20 most expensive cities in the world for expatriates.
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