Karachi ranked Asia’s cheapest cities to live in

[Naveed Yaseen]

KARACHI: Surprise, surprise! Finally some good news: Karachi continues to be the least costly city in Asia, in 141st place with a score of 54.7 in a survey of the cheapest to live in carried out by human resources firm Mercer.

Moscow has topped the league of the most expensive cities for expatriates to live in for the third year running, BBC News reported Thursday. The research took account of expenses such as rent, eating out and petrol. Moscow has particularly expensive coffee, with a cup in a café costing $10.40 (5.19) including service. Tokyo climbed two spots into second place in the survey, followed by London, which dropped one place into third, and Oslo, which came fourth.

The survey compared the cost of 200 items in 143 cities. The three cheapest cities were Karachi in Pakistan, Quito in Ecuador and Asuncion in Paraguay. “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,” Yvonne Traber, a principal and research manager at Mercer, commented. “Conversely, some locations such as Stockholm and New York now appear less costly by comparison.

“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.”

For Mercer, keeping on top of the changes in expatriate cost of living is essential so companies can ensure their employees are compensated fairly and at competitive rates when stationed 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 noted.

In the UK, as well as London slipping one place, Birmingham dropped from 41st to 66th, while Glasgow fell from 36th to 69th. In addition to London dropping one place, two additional UK cities, Birmingham and Glasgow, have both moved down in the rankings, dropping from 41st to 66th (score 85.4) and 36th to 69th (score 84), respectively.

Both Dubai and Abu Dhabi have dropped significantly this year, positioned at 52 (score 89.3) and 65 (score 85.7), respectively. This is mainly due to the UAE dirham being pegged to the US dollar.

The only North American city to feature in this year’s top 50 is New York in 22nd place (score 100), dropping seven places in one year. All other US cities have also experienced a significant decline in the rankings. For example, Los Angeles has moved from 42nd to 55th place (score 87.5), Miami from 51st to 75th place (score 82) and Washington, DC, from 85th to 107th place (score 74.6).

“The decline in the ranking of all US cities is due to the weakening value of the US dollar against most major world currencies,” said Mitch Barnes, principal at Mercer in the US. “The dollar has been declining steadily for the past several years, which has resulted in an overall decrease in the cost of living in 19 US cities, relative to other major global cities studied.

In 54th place (score 88.1), jumping 28 places from last year, Toronto is the most expensive city for expatriates in Canada. All other Canadian cities in the survey have experienced similar rises, with Vancouver moving from 89th to 64th (score 85.8), Calgary from 92nd to 66th (score 85.4) and Montréal from 98th to 72nd with a score of 83. This reverses last year’s trend which saw Canadian cities decline, and places them back where they have traditionally been rated. The Canadian dollar has appreciated nearly 15% against the US dollar.

Whilst the five top-scoring cities in Asia remain relatively stable in the ranking there have been significant changes further down the list. In India, Mumbai moves up four places to reach 48, whereas New Delhi climbs 13 places to 55 due to the strengthening of the India rupee against the US dollar. Although India has experienced relatively high inflation, this has increased at similar pace to New York and has therefore had a reduced impact on its cities’ rise in the rankings.

Sydney continues to be the most expensive city for expatriates in this region. Melbourne follows in 36th place and Perth climbs 31 places. ppi/mercer

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