International Business - Global Cost of Living Trends - March 2008

The US has become less expensive for expatriates6. Quito, Ecuador (53.23)
relative to cities in Asia and Africa over the past7. Buenos Aires, Argentina (53.25)
year, says a cost of living comparison of 228 global8. La Paz, Bolivia (53.54)
cities.9. Asmara, Eritrea (54.49)
The cost of living comparison prices goods and10.Tashkent, Uzbekistan (56.06)
services that expatriates spend their salaries on, andThis means that overall, goods or services that cost
reports indexes for 13 different basket groups usingUSD$100 in New York, cost the equivalent of just
New York (100) as the base.USD$16.44 in Harare, and USD$53.54 in La Paz.
In terms of overall cost of living, New York is nowThe cost of living varies from one location to another
the 28th most expensive global city and the 61st inand by type of expense, mainly due to local supply
terms of groceries. New York has dropped primarilyand demand variations in each location. In some cities,
due to the weakness of the US Dollar as well as thegroceries are more costly while accommodation is
economic slowdown which appears to have slowedrelatively less costly and vice versa.
the increase in prices relative to other global cities.In terms of groceries Seoul is the most expensive.
The global cost of living comparison conducted byAfrica however has 6 of the 10 most expensive
shows London is the most expensive global locationcities, Brazzaville, Accra, Lagos, Abidjan, Kinshasa, and
for expatriates, while 3 of the top 5 most expensiveLuanda.
cities are in Asia, with Tokyo, Seoul, and Hong KongGrocery Cost of Living Comparison – Top 10
ranked 2nd, 3rd, and 5th respectively in terms ofThe top 10 (most expensive) global cities for
overall cost of living.expatriates to live using the price of groceries as at
Overall Cost of Living Comparison – Top 10March 2008 are as follows:
The 10 most expensive global cities for expatriates1. Seoul, Republic of Korea
to live, based on overall cost of living (Index is in2. Brazzaville, Congo
brackets) as at March 2008 are:3. Ashgabat Turkmenistan
1. London, United Kingdom (126.63)4. Accra, Ghana
2. Tokyo, Japan (121.88)5. Lagos, Nigeria
3. Seoul, Republic of Korea (119.54)6. Copenhagen, Denmark
4. Oslo, Norway (115.39)7. Abidjan, Cote D'Ivoire
5. Hong Kong, China (113.00)8. Kinshasa Congo Democratic Rep
6. Copenhagen, Denmark (112.63)9. Luanda, Angola
7. Moscow, Russia (110.35)10.Oslo, Norway
8. Geneva, Switzerland (110.06)When establishing a salary for a global assignment it
9. Hamilton, Bermuda (109.63)is essential that the items the expatriate will actually
10.Luanda, Angola (108.51)spend their salary on are included in the cost of living
This means that overall goods or services that costcalculation. Similarly the items that are provided for
USD$100 in New York, cost the equivalent ofthe expatriate should be excluded from the cost of
USD$126.63 in London, and USD$108.51 in Luanda.living calculation. If the incorrect items are included or
Overall Cost of Living Comparison – Bottom 10excluded, large variations in the calculation of cost of
The bottom 10 (least expensive) cities forliving are likely. As an example London is ranked as
expatriates to live, based on overall cost of livingthe most expensive global location in terms of overall
(Index is in brackets) as at March 2008 are:cost of living, but is only ranked 26th most expensive
1. Harare, Zimbabwe (16.44)location for groceries.
2. Phnom Penh, Cambodia (44.89)Africa and Asia are becoming relatively more
3. Sanaa, Yemen (44.95)expensive than other global cities after lagging for
4. Dushanbe, Tajikistan (51.24)decades; organisations need to factor this into
5. Tripoli, Libya (53.22)expatriate pay calculations for global assignments.