According to Mercer's Cost of Living City Ranking 2023, the average cost of living has risen by 8.1%, owing mostly to the Russian war in Ukraine and the long-term effects of the pandemic.
This year's Worldwide Cost of Living Index shows the ranking of the world's most expensive cities right now, taking into account changes in the price of everyday goods in 172 cities around the world.
Hong Kong tops the Cost-of-Living City Ranking. It is followed by Singapore, which has jumped up six positions since last year, pushing Zurich to spot number three. The least expensive locations in the ranking, both in Pakistan, are Karachi and Islamabad.
This year, two out of 10 of the most expensive cities for international employees to live in are in Asia, compared to four last year. Hong Kong is ranked as the most expensive city for international employees in 2023, followed by Singapore (2) and Zurich (3). The least expensive locations in the world are also located in Asia, namely Karachi (226) and Islamabad (227).
Tel Aviv remains the costliest city in the Middle East for international employees, ranked 8th on the global ranking. The next most expensive cities in this region are in the United Arab Emirates, namely Dubai (18) and Abu Dhabi (43), both of which have seen significant increases in their rankings since last year.
The global top ten includes five European cities, and four of those are in Switzerland, namely Zurich, Geneva, Basel, and Bern, with the fifth being Copenhagen. Other expensive cities in the region include London, Vienna, Amsterdam, Prague, and Helsinki.
New York City, ranked sixth globally, is the most expensive city in North America, followed by Los Angeles (11) and San Francisco (14). In Central and South America, Nassau is the most expensive location, followed by San Juan and Buenos Aires. All US cities in the ranking have gone up since last year, with Detroit, Houston, and Cleveland experiencing the largest changes.
In Africa, the highest-ranking cities in terms of cost of living are Bangui (26), Djibouti (27), and Luanda (30). Windhoek (222), Durban (220), and Tunis (219) are the least expensive cities in the region, with Cairo dropping significantly in the rankings compared to last year.
Key Factors Influencing the Global Economy
The key factors influencing the global economy in 2022, such as the Russia-Ukraine crisis and the emergence of COVID-19 variants, continue to have an impact in 2023. Aggressive national monetary policies and tightening global financial conditions are leading to slower income growth and rising unemployment in many economies.
High debt levels and inflation are also affecting the pay and savings of internationally mobile employees. Inflation is expected to remain persistent in the wider Mena region at about 15% this year, broadly in line with 2022 levels, according to the Washington-based fund.
“Due to the recent introduction of aggressive national monetary policies and the tightening of global financial conditions, many economies are likely to see slower income growth this year, along with rising unemployment,”
High inflation and market fluctuations are affecting the purchasing power and standard of living of individuals. With global inflationary pressures remaining, Mercer took a closer look at how the prices of selected goods have changed since last year. When a basket of ten everyday items was examined, sugar, cooking oil, and butter stood out as the items with the greatest price increases. The price of gasoline, on the other hand, appears to have slowed, with a decrease occurring in a number of locations.
After Singapore, which saw rent increases averaging 50% depending on the area, Dubai was the second city in the survey where rental cost had a significant impact on the ranking, with rent increases averaging 25%, Mercer said. By contrast, the impact of the housing movement was notably lower in Abu Dhabi, where the change ranged between 6% and 8% and in some areas remained the same as last year, Mercer added.
Top 10 most expensive cities for expatriates in 2023
- Hong Kong
- Zurich, Switzerland
- Geneva, Switzerland
- Basel, Switzerland
- New York City, US
- Bern, Switzerland
- Tel Aviv, Israel
- Copenhagen, Denmark
- Nassau, Bahamas
Top 10 cheapest cities for expatriates in 2023
- Islamabad, Pakistan
- Karachi, Pakistan
- Havana, Cuba
- Bishkek, Kyrgyzstan
- Dushanbe, Tajikistan
- Windhoek, Namibia
- Ankara, Turkey
- Durban, South Africa
- Tunis, Tunisia
- Tashkent, Uzbekistan
If you’re interested in knowing more, read the Worldwide Cost of Living Index report here.