Dhaka has emerged as a significantly expensive city for foreigners as it advanced by 14 spots to stand at 140 on the list of expensive cities for international employees across the world.
The Bangladesh capital outshined Indian capital New Delhi (165th) and Pakistan capital Islamabad (224), alongside some other cities of the two countries, including Bengaluru (195), Hyderabad (202), Karachi (222) and Kolkata (207).
However, Indian business hub Mumbai surpassed these cities to stand at the 136th spot, and became the country's most expensive city, according to the 2024 cost of living city ranking released by US-based consulting firm Mercer.
On the ranking, Hong Kong retained the top spot as the world’s most expensive city for international employees, followed by Singapore. Swiss cities Zurich, Geneva, and Basel round out the top five most expensive cities.
Global scenario
Of the 10 most expensive cities for international assignees, half are located in Western Europe, with Switzerland being home to four. However, it is Southeast Asian cities that lead the list, with Hong Kong and Singapore remaining in the first and second positions, respectively. The two most affordable cities are Lagos (225) and Abuja (226), both located in Nigeria on the African continent.
European cities feature heavily in the top 10 most expensive places to live. In addition to the four Swiss cities, London has joined the top 10 ranking in 8th place. Other expensive cities in the region include Copenhagen (11), Vienna (24), Paris (29) and Amsterdam (30).
Dubai has jumped up the rankings to become the costliest city in the Middle East for international employees. It is ranked 15th on the global ranking, up three places from 2023. The next most expensive city in this region is Tel Aviv, which has dropped by eight places to rank 16th. It is followed by Abu Dhabi (43), Riyadh (90) and Jeddah (97).
In North America, New York City (number 7 in the global ranking) remains the most expensive city. It is followed by Nassau, Bahamas (9), Los Angeles (10), Honolulu (12), and San Francisco (13). The biggest differences found in North America’s year-on-year rankings are both in Mexico. The capital, Mexico City, went up 46 places to 33, and Monterrey went up 40 places to 115.
African cities that placed highest in the global Cost of Living City Ranking are Bangui (14, up 12 places), Djibouti (18) and N'Djamena (21). The least expensive cities in the region include Blantyre (221), Lagos (225, down 178 places) and Abuja (226).
In addition to Hong Kong and Singapore, the other most expensive cities in Asia include Shanghai (23), Beijing (25) and Seoul (32). Some of the least expensive cities in the region are Karachi (222), Bishkek (223) and Islamabad (224).
For the Pacific region, Sydney tops the list at 58th place, followed by Noumea, New Caledonia (60); Melbourne (73); and Brisbane (89). New Zealand’s Auckland and Wellington remain the least expensive Pacific locations, coming in at 111th and 145th, respectively.
“Cost-of-living challenges have had a significant impact on multinational organisations and their employees,” said Yvonne Traber, Mercer’s global mobility leader. “It is important for organizations to stay informed about cost-of-living trends and inflation rates and seek input from employees on these issues to effectively manage their effects.”
Rising housing costs in many cities around the world have made talent mobility a challenge for employers. Volatile inflation trends are also eroding the purchasing power of international assignees and putting additional strain on their compensation packages.
These factors can make it difficult for employers to attract and retain top talent and can increase compensation and benefits expenses, limit talent mobility, and raise operational costs.
“High living costs may cause assignees to adjust their lifestyle, cut back on discretionary spending or even struggle to meet their basic needs,” continued Traber. “To offset these challenges, employers can offer compensation packages that include housing allowances or subsidies or provide other support services. They can also explore alternative talent sourcing strategies.”