Tokyo falls out of top 10 most expensive cities
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After holding the dubious title of the world’s most expensive city for expats for much of the past two decades, Tokyo no longer even makes the top 10.
At least those are the findings of the annual cost of living survey by consultants Mercer. The reason behind its demise — Japan’s biggest metropolis slid from seventh to 11th spot after occupying third spot in 2013 rankings — was the weakness of the yen against the US dollar over the past year.
Indeed, exchange rate fluctuations have played havoc with the 2015 rankings, which are now in their 21st year.
“Currency movements will always play a really big part in the rankings but the impact this year has been particularly acute,” said Kate Fitzpatrick, a consultant at Mercer.
Both the yen and the euro have weakened markedly against the US dollar and Chinese renminbi, while the Swiss franc has also strengthened after the surprise lifting of its currency cap at the start of the year.
As a result, Zurich and Geneva have both moved up one place to occupy two of the five top spots in the rankings. Bern slid one place to ninth but only because of a strong showing from Shanghai, Beijing and Seoul.
The survey compares a basket of over 200 goods and services, from imported food staples and the cost of hamburger to the price of a cinema ticket, and combines it with the cost of renting international standard accommodation.
The biggest faller in the top 10 was Moscow, which plunged from ninth to 50th, as the result of the sharp fall in the rouble following the imposition of tighter economic sanctions.
N’Djamena, the largest city in Chad, where the CFA franc is pegged to the euro, dropped from second to 10th place.
It is the scarcity of many of those items sampled, along with chart-topping accommodation costs, that means Luanda retains first place. A pair of jeans in the Angolan capital will set you back $247.53, more than four times the cost of the same item in New York.
The Mercer survey uses New York as its base city to compile the rankings, so the relative strength of the US currency has a big impact on the league table.
US cities in the rankings have risen by an average of 36 places. New York remains the most expensive US city, unchanged in 16th place, followed by Los Angeles, which jumped to 36th from 62nd.
Similarly, the strength of the renminbi saw China’s cities rise on average by 18 places.
The rankings are designed to help multinationals and governments determine at what level to set foreign posting allowances for their employees.
London, which retains its 12th spot in the rankings, largely because of rising rents, looks like a better bet for a cup of coffee, at $3.83, compared with Hong Kong, where it will set you back $7.80. The former British colony boasts the highest rents outside Luanda.