Global HR firm Mercer’s “Cost of Quality of Living Survey 2015” was released little over a week ago. While Luanda (Angola’s capital) remained at the costliest place to live for expatriates, Mumbai is declared as one of the most expensive cities of the world. Let’s get into the details of this report.
What is Mercer’s Cost of Living Ranking?
This survey covers 207 prevalent destinations. The basic objective is to make an assessment of the lifestyle and living conditions of the people in these cities to provide MNCs and other organisations a clear picture on compensation to be offered to employees when putting them on international assignments. Mercer collects Quality of Living Reports and Location Evaluation Reports for each destination. The survey measures the comparative cost of more than 200 items in each of the 207 cities, including food, clothing, housing, transportation, household goods and entertainment.
Top 5 Expensive Cities
The top 5 expensive countries in the world for expatriates as per the report are as follows:
Luanda (1)
Hong Kong (2)
Zurich (3)
Singapore (4)
Geneva (5)
For the third consecutive year, Luanda, the capital of Angola, has been declared as the world’s costliest city to live in. It is also revealed in the report that Asian cities dominate the top 10 costliest cities rankings.
Least Expensive Cities
According to Mercer’s survey, the world’s least expensive cities for expatriates are as follows:
Karachi in Pakistan (205)
Windhoek in Namibia (206)
Bishkek in Kyrgyzstan (207)
Emerging Business Cities of the World
According to the survey, the following cities are emerging as the business centres all around the world:
- Durban in South Africa (85) for its growing manufacturing and shipping centres
- Cheonan in South Korea (98) for its technology and university centre
- Taichung in Taiwan (99) for its local and international industries
- Wroclaw in Poland (100) for its talent pool and good infrastructure
- Manaus in Brazil (127) for its free economic zone
- Hyderabad in India (138) for its service industry
- Chongqing in China (142) for its automotive industry centre and transportation hub
- Xi’an in China (142) for its technology development zone
- Pune in India (145) for its IT and automotive companies
Mumbai: One of the Most Expensive Cities of the World
Mumbai has attained the 74th rank in the world in the quality of living survey. Its rank has moved by 66 places from the previous year. In fact, Mumbai’s cost of living is much higher than some cities of the developed countries. Mumbai is well ahead of Dallas (77), Munich (87), Luxembourg (94), Frankfurt (98) and Vancouver (119). Chennai and Delhi have also moved up in rankings by 28 and 25 places, respectively.
Why Mumbai?
Compared to other metro cities of India or for that matter all over the world, Mumbai’s cost of living has grown up recently because of the following reasons:
- Rapid economic growth
- Higher inflation on the food items and other goods
- Higher prices of the services like home service, rentals and real estate
- Higher cost of fuel
- Higher cost of transportation
To Sum Up
An official of Mercer India stated that with so many Indian multinational organisations expanding their offices globally, within a span of the next two years, 85% of these organizations are expecting expatriate assignments to rise in order to meet the various business needs. Changes in foreign exchange create credit crisis and rising costs for many multinational organisations.
Foreign exchange fluctuations, usually caused by economic and political factors, decide the cost of expatriate packages. It has been revealed in the Mercer’s 21st Cost of Living Survey that factors like instability of housing markets and increased prices of goods and services affect, to a great extent, the overall cost of living and business operations.
