ISLAMABAD: Hong Kong, Singapore and Zurich are the three most expensive cities in the world for foreign workers in 2023, according to the annual Cost of Living survey by global consultancy Mercer, foreign media reported. Three more cities in Switzerland are in the top 10, with Geneva, Basel and Bern ranked fourth, fifth and seventh, respectively. New York City, ranked sixth globally, is the most expensive city in the Americas, according to the survey, which compared the prices of 200 goods and products in more than 400 cities. Tel Aviv in Israel was ranked the eighth most expensive city for international workers, making it the costliest in the Middle East. Copenhagen and Nassau in the Bahamas rounded off the top 10, ranking ninth and 10th, respectively. “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,” Mercer said. “Debt levels among many countries remain high and core inflation has not yet peaked in many markets. Inflation and exchange rate fluctuations are directly impacting the pay and savings of employees who are internationally mobile.”
The escalation of the Russia-Ukraine crisis, the emergence of more contagious Covid-19 variants, exchange rate fluctuations and widespread inflation all affected expatriate salaries and savings, the report found. Inflation globally is expected to drop to 7 per cent this year. It is expected to be at 4.9 per cent in 2024, from a high of 8.7 per cent in 2022, according to the International Monetary Fund’s Regional Economic Outlook on the Middle East and Central Asia.
The Organisation for Economic Co-operation and Development trimmed its outlook for headline inflation by 0.1 percentage points to 5.9 per cent in 2023, although it increased its forecast for core inflation, which excludes volatile food and energy prices, to 4 per cent. Inflation is expected to “moderate gradually” this year, and in 2024 after central banks raised their rates to tame consumer prices that have soared since Russia invaded Ukraine, the Paris-based agency said in March. Dubai was ranked the 18th most expensive city for expatriates, up from 31st last year, while Abu Dhabi climbed to 43rd from 61st during the reporting period.
After Singapore, which saw rent increases averaging 50 per cent 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 per cent, Mercer said. By contrast, the impact of housing movement was notably lower in Abu Dhabi, where the change ranged between 6 per cent and 8 per cent and in some areas remained the same as last year, it added. “Employers in the UAE are taking note of these changes. Our research indicates that organisations have provided an average of 4.2 per cent annual merit increase in 2023,” Vladimir Vrzhovski, financial services and technology industries lead at Mercer Middle East, said.
“Many of them are reviewing their remuneration packages, with a growing number increasing bonuses instead of increasing base salaries to boost the total compensation without long-term commitment.” In the Middle East, the Saudi cities of Riyadh and Jeddah were ranked 85th and 101st. Manama in Bahrain was ranked the 98th most expensive city for foreign workers this year. They were closely followed by Amman in Jordan at 110, Doha in Qatar (126), Muscat in Oman (130) and Kuwait City (131). Besides the Swiss cities and Copenhagen, the other most expensive cities in Europe included London, Vienna, Amsterdam, Prague and Helsinki. Los Angeles, San Francisco and Honolulu, as well as Asian cities like Shanghai, Beijing, Seoul, Tokyo and Shenzhen, also ranked in the top 20 most expensive cities, Mercer found.
African cities that ranked high in the global cost of living ranking were Bangui, Djibouti and Luanda in Angola. The survey helps to determine the cost of packages for employees on international assignments, which depend on factors such as currency fluctuations, cost inflation for goods and services and accommodation expenses. Mercer measured the comparative cost of more than 200 components – including housing, transport, utilities, food, domestic supplies and entertainment – to come up with its ranking. At the other end of the spectrum, the cheapest places for expatriates to live include Islamabad and Karachi in Pakistan, Havana in Cuba, Bishkek in Kyrgyzstan and Dushanbe in Tajikistan, Mercer said.
Top 10 most expensive cities for expatriates in 2023:
Hong Kong; Singapore; 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.
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