Global overview. Asia

Transcription

1 Global overview Moscow is the world s most expensive city for expatriates for the third consecutive year, according to the survey. Tokyo is in second position climbing two places since last year, whereas London drops one place to rank third. Oslo climbs six places to 4 th place and is followed by Seoul in 5 th. Asunción in Paraguay is the least expensive city in the ranking for the sixth year running. Moscow scores and is close to three times costlier than Asunción which has an index of Contrary to the trend observed last year the gap between the world s most and least expensive cities now seems to be widening. Yvonne Traber, a principal and research manager at Mercer, commented: 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. 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, Ms Traber said. 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. For example, Latvia had real GDP growth of 10.2 percent in 2007, well above the global average growth rate of 5.2 percent, and its capital, Riga, jumped to 46 th place in the latest Mercer ranking, up from 72 nd a year ago. Cities in India all rose in the cost of living ranking, with New Delhi climbing to 55 th place from 68 th a year ago, as India posted a real GDP growth rate of 9.2 percent in Bogota jumped to 87 th place from 112 th, reflecting Colombia s 7 percent real GDP growth, she noted. Asia Tokyo is the costliest Asian city, in 2 nd place (score 127), two places up since last year. Seoul follows in 5 th place (score 117.7) and Hong Kong closely after in 6 th with a score of Singapore ranks 13 th and holds a score of Karachi continues to be the least costly city in this region, in 141 st place with a score of 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 (score 90.3), whereas New Delhi climbs 13 places to 55 (score 87.5) 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

2 had a reduced impact on its cities rise in the rankings. Manila rises a total of 27 places, ranking 110 th with a score of 73.4, mainly as a result of price increases for internationalstandard accommodation. In contrast, certain cities in this region have experienced significant falls in the ranking. Some examples are Jakarta falling from 55 th to 82 nd place (score 80.5) and Bangkok dropping from 95 th to 105 th place with a score of In Vietnam, Hanoi drops 35 places to rank 91 (score 79) and Ho Chi Minh City drops 40 places to rank 100 th (score 76.3), mainly because the Vietnamese dong has remained stable against the US dollar and so has pushed these cities down on the list. The low level of inflation observed on goods in these Vietnamese cities compared to in New York has further widened the gap. Europe, Middle East and Africa Moscow is ranked the most expensive city both in Europe and globally for the third year running. The city s score has steadily increased over the last few years and is currently at (compared to in 2007 and in 2006). Moscow s position as the most expensive place for expatriate living has been strengthened by the appreciation of the rouble against the US dollar and the continuous rising accommodation costs, said Ms Traber. London is the next European city in the ranking at 3 rd place (score 125), down one from last year, while Oslo has jumped six places to rank 4 th with a score of Norwegian property prices were at an all-time high towards the end of last year after a 50 percent increase in the last five years. Coupled with the continuous strengthening of the Norwegian krone this has created a substantial increase in living costs for expatriates in Oslo, said Ms Traber, principal at Mercer. Other European cities in the global Top 10 include Copenhagen at 7 th (117.2) and Geneva in 8 th (115.8). Both cities have dropped one place from last year. Zurich remains in 9 th place (112.7), whereas Milan climbs one to 10 th place with a score of Sofia in Bulgaria is again the least expensive European city for expatriates in 97 th place (76.9), although the city has climbed 11 places in the overall ranking. Several European cities have experienced a significant rise in the rankings this year, mainly as a result of local currency strengthening against the US dollar. For example, Prague has jumped from 49 th to 29 th place (score 96) and Warsaw is up to 35 th place (score 95) compared to 67 th in Istanbul has climbed 15 places to rank 23 (score 99.4) reflecting the Turkish lira s significant appreciation against the US dollar as well as general price increases, especially for accommodation. In addition to London dropping one place, two additional UK cities, Birmingham and Glasgow, have both moved down in the rankings, dropping from 41 st to 66 th (score 85.4) and 36 th to 69 th (score 84), respectively. In contrast to the strengthening euro and other European currencies, the British pound has remained relatively stable against the US dollar. As the cost of living in the Eurozone has risen relative to the US, UK cities have declined in the rankings, according to Ms Traber. Tel Aviv is again the most expensive city in the Middle East, positioned 14 th (score 105) on the global list, up three places from Both Dubai and Abu Dhabi have dropped significantly this year, positioned at 52 (score 89.3) and 65 (score 85.7), respectively.

3 This is mainly due to the UAE dirham being pegged to the US dollar. Most African cities in the survey have moved down the ranking with the exception of Lagos in Nigeria, which has jumped seven places to join the Top 30 at position 30 (score 95.9). The Americas The only North American city to feature in this year s top 50 is New York in 22 nd 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 42 nd to 55 th place (score 87.5), Miami from 51 st to 75 th place (score 82) and Washington, DC, from 85 th to 107 th 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. "On the bright side, the US dollar's loss of value may serve to attract globally mobile executives to business centres such as New York, Chicago and Los Angeles. The difference in cost of living can be significant, particularly for those executives with families." In 54 th 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 89 th to 64 th (score 85.8), Calgary from 92 nd to 66 th (score 85.4) and Montréal from 98 th to 72 nd 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 percent against the US dollar, the main reason for these movements. The two top-ranking cities in South America are São Paulo in 25 th place (score 97) and Rio de Janeiro in 31 st place (score 95.2), jumping 37 and 33 places, respectively. The Brazilian real appreciated nearly 18 percent against the US dollar last year, causing these Brazilian cities to rocket up the list. Another high-riser in this region is Caracas, jumping 40 places from 129 th to 89 th (score 79.3). High inflation in Venezuela has caused a sharp increase in the price of food and household products. South America also has some of the lowest ranking cities globally. Asunción is the least expensive city for the sixth consecutive year (score 52.5), followed by Quito in Ecuador in 142 nd (score 54.6), Buenos Aires in 138 th (score 62.7) and Montevideo in 136 th (score 63.2). Individual reports are produced for each city surveyed. For further information or to purchase copies of the city reports, visit or call Information Product Solutions, Warsaw on ENDS

4 Notes for Editors The figures for Mercer s cost of living comparisons are based on a survey conducted in. The comparisons are based on a similar survey conducted in The information is used by governments and major companies to protect the purchasing power of their employees when transferred abroad. The choice of cities surveyed is based on the demand for corresponding data from companies and governmental organizations. Mercer is a leading global provider of consulting, outsourcing and investment services. Mercer works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement and other benefits. It is a leader in benefit outsourcing. Mercer s investment services include investment consulting and multi-manager investment management. Mercer s 18,000 employees are based in more than 40 countries. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York, Chicago and London stock exchanges. For more information, visit Mercer Cost of Living Survey Worldwide, 2007 City Country Moscow Russia Tokyo Japan London UK Oslo Norway Seoul South Korea Hong Kong China Copenhagen Denmark Geneva Switzerland Zurich Switzerland Milan Italy Osaka Japan Paris France Singapore Singapore Tel Aviv Israel

5 Mercer Cost of Living Survey Worldwide, 2007 City Country Sydney Australia Dublin Ireland Rome Italy St. Petersburg Russia Vienna Austria Beijing China Helsinki Finland New York City US Istanbul Turkey Shanghai China Amsterdam Netherlands Athens Greece São Paulo Brazil Madrid Spain Prague Czech Rep Lagos Nigeria Barcelona Spain Rio de Janeiro Brazil Stockholm Sweden Douala Cameroon Warsaw Poland Melbourne Australia Munich Germany Berlin Germany Brussels Belgium Frankfurt Germany Dakar Senegal Kiev Ukraine Luxembourg Luxembourg Almaty Kazakhstan Bratislava Slovakia

6 Mercer Cost of Living Survey Worldwide, 2007 City Country Düsseldorf Germany Riga Latvia Mumbai India Zagreb Croatia Hamburg Germany Abidjan Ivory Coast Dubai UAE Perth Australia Toronto Canada Los Angeles US New Delhi India Algiers Algeria Lyon France Lisbon Portugal Brisbane Australia Shenzhen China Budapest Hungary Taipei Taiwan Vancouver Canada Abu Dhabi UAE Birmingham UK Calgary Canada Limassol Cyprus Glasgow UK Guangzhou China Bucharest Romania Montréal Canada Adelaide Australia Tehran Iran Miami US Tallinn Estonia

7 Mercer Cost of Living Survey Worldwide, 2007 City Country Honolulu US San Francisco US Auckland New Zealand Beirut Lebanon Casablanca Morocco Jakarta Indonesia Ljubljana Slovenia Chicago US Vilnius Lithuania Ottawa Canada Bogotá Colombia Amman Jordan White Plains, NY US Caracas Venezuela Hanoi Vietnam Santiago Chile Wellington New Zealand Kuwait City Kuwait Leipzig Germany Accra Ghana Sofia Bulgaria Houston, TX US Boston, MA US Ho Chi Minh City Vietnam Cairo Egypt Lusaka Zambia Nairobi Kenya San Juan Puerto Rico Bangkok Thailand Kuala Lumpur Malaysia Washington, DC US

8 Mercer Cost of Living Survey Worldwide, 2007 City Country Mexico City Mexico Atlanta, GA US Manila Philippines Morristown, NJ US Manama Bahrain Seattle, WA US Bandar Seri Begawan Brunei Lima Peru Denver, CO US Chennai (Madras) India Bangalore India Riyadh Saudi Arabia St. Louis, MO US Kingston Jamaica Guatemala City Guatemala Tianjin China Panama City Panama Blantyre Malawi Jeddah Saudi Arabia Detroit, MI US Portland, OR US Cleveland, OH US Colombo Sri Lanka Monterrey Mexico Dacca (Dhaka) Bangladesh Pittsburgh, PA US Tunis Tunisia Winston-Salem US Montevideo Uruguay Santo Domingo Dominican Rep Buenos Aires Argentina

9 Mercer Cost of Living Survey Worldwide, 2007 City Country San José Costa Rica Johannesburg South Africa Karachi Pakistan Quito Ecuador Asunción Paraguay (New York = 100) Note the Cost of Living Indices in the press release and this table have been prepared specifically for the purpose of the press release. The indices are based on Mercer's cost of living database and are modified to include housing and to reflect constant weighting and basket items. The results may differ from those calculated for Mercer's clients who use the results solely for the purpose of expatriate compensation. We do not recommend that expatriates use the figures represented here to compare their -Ends- About Mercer: Mercer is a leading global provider of consulting, outsourcing and investment services, serving over 25,000 clients worldwide. Mercer consultants help clients maximise the effectiveness of their employee health, welfare and retirement programs, and optimise workforce performance while managing costs. The firm provides customised administration, technology and total benefit outsourcing solutions. Mercer s investment services include global leadership in investment consulting, retirement plan design and governance, and multi-manager investment management. Mercer s global network of more than 18,000 employees, based in more than 40 countries, ensures integrated, worldwide solutions for clients who wish to establish global policies and procedures while allowing for the flexibility to accommodate local cultural, legal and regulatory requirements. Our locally based professionals are also available to serve mid-size companies and to address country specific issues and opportunities. For more information, visit