International Compensation: Luanda, Hong Kong, Zurich Most Expensive Cities for Expats, Survey Says

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By Rick Vollmar

June 18—The most expensive cities to post an expatriate employee are Luanda, Hong Kong, Zurich, Singapore and Geneva, according to Mercer's 2015Cost of Living Survey.

Social, economic and political conditions in individual countries contribute to the relative cost of a posting—Luanda, for example, would be a relatively inexpensive city for an expatriate to live were it not that goods are expensive to import from outside the country and safety concerns significantly hike security expenses—but currency fluctuations are also an important contributing factor. U.S. cities have become more expensive postings as the dollar has strengthened against other major currencies, while depreciation of their national currencies against the dollar have driven down expatriate living costs in major cities across Europe. While Zurich, Geneva and Bern rank among the top 10 most expensive cities, for example, Paris, Vienna, Rome, Berlin, Prague and Budapest all fell compared to last year's rankings, Berlin by over 100 places.

“Despite moderate price increases in most of the European cities, European currencies have weakened against the U.S. dollar which pushed most Western European cities down in the ranking,” said Nathalie Constantin-Métral, Mercer principal with responsibility for compiling the survey ranking. “Additionally, other factors like the Eurozone’s economy, falling interest rates and increasing unemployment have impacted these cities.”

The situation is much the same in Asia.

“Japanese cities have continued to drop in the ranking this year as a result of the Japanese yen weakening against the U.S. dollar,” Constantin-Métral said, while “Chinese cities jumped in the ranking due to the strengthening of the Chinese yuan along with the high costs of expatriate consumer goods.”

Mercer provides specific examples of the cost of various items in different countries to illustrate how expatriate employees (and the employers financing their stays) would be directly affected by the differences. Lunch at a fast food restaurant in New York City, for example, would on average cost under $8, a comparable meal in Luanda over $17 and in Moscow just over $3. A cup of coffee that would cost $3 in New York will cost almost $8 in Hong Kong, and a pair of jeans sold in New York for under $60 would cost almost $250 in Luanda, $143 in Beijing and $125 in Buenos Aires.

To contact the reporter on this story: Rick Vollmar at rvollmar@bna.com

Mercer's survey includes 207 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment. Additional information is available at https://www.imercer.com/content/cost-of-living.aspx.