Mumbai is the most expensive city in India for expatriates, ranking 118 among the 214 cities across five continents studied by Mercer for its latest Cost of Living Survey.

Although more European cities dominate the world’s top costliest locations for expatriates, according to Mercer’s Survey, several Asian cities are among the top 10.

Luanda, Angola, holds the number one position. New York, the base city for survey, is the most expensive city in the United States.

Mercer is a wholly-owned subsidiary of Marsh & McLennan Companies offering clients advice and solutions in the areas of risk, strategy, and human capital. Mercer's 2013 Cost of Living Survey is designed to help multinational companies and Governments determine compensation allowances for their expatriate employees, it said in a statement.

Currency movements are measured against the US dollar, it said. The survey measures the comparative cost of over 200 items in each location, including transportation, food, clothing, household goods, and entertainment.

On how the survey is utilised, Mercer said, governments and major companies use this data to protect the purchasing power of their employees when transferred abroad and rental accommodation costs data is used to assess local expatriate housing allowances. The choice of cities surveyed is based on the demand for data.

Cities in South America are the most expensive locations for expatriates with Sao Paolo (19) ranked as the costliest city. San Jose, Costa Rica (126) and Mexico City (138) are the most expensive cities in Central America and Mexico. Vancouver (64) is the highest ranking Canadian city.

Among the cities in South America, some dropped in the ranking as a result of local currencies weakening against the US dollar such as Brazilian cities, while others jumped as a result of high inflation on goods and services and rentals, the survey said.

The difference in cost for these items can be dramatic, it points out. For example a cup of coffee in Managua, Nicaragua is $1.54 compared to $8.29 in Moscow; a fast food hamburger meal is $3.62 in Kolkata, India, versus $13.49 in Caracas, and a cinema ticket is $5.91 in Johannesburg, compared to $20.10 in London.

Housing 

The cost of expatriate housing is typically the biggest expense for employers, and it plays an important part in determining the rankings. The Russian capital of Moscow follows Luanda as the second most expensive city because of high costs for rental accommodation and imported goods and services commonly purchased by expatriates commanding a premium.

“Recent world events, including economic and political upheavals, which resulted in currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices have impacted these cities making them expensive,” said Barb Marder, Senior Partner and Mercer’s Global Mobility Practice Leader.

“Despite being one of Africa’s major oil producers, Angola is a relatively poor country yet expensive for expatriates since imported goods can be costly. In addition, finding secure living accommodations that meet the standards of expatriates can be challenging and quite costly," he added.

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