Sofia ranks 172nd out of 211 in list of most expensive cities for expatriates

Written by on July 10, 2014 in Bulgaria - Comments Off on Sofia ranks 172nd out of 211 in list of most expensive cities for expatriates

Bulgaria’s capital city Sofia ranked 172nd in a list of 211 cities in the Mercer 2014 Cost of Living Survey.

Sofia was up from 181st place in the 2013 survey, and its 2014 ranking put it higher than a number of other cities in Central and Eastern Europe: Belgrade (184), Sarajevo (188), Tirana (189) and Skopje (193).

But the Bulgarian capital came in as less expensive for expats compared to quite a number of other places in Central and South Eastern Europe: Bucharest, the capital of neighbouring Romania, was in 159th place, Warsaw 142nd, Turkey’s largest city Istanbul 135th, jointly with Budapest, Zagreb was 120th, Ukraine’s capital Kyiv 98th, Prague 92nd and Greek capital Athens 78th.

Sofia was the only Bulgarian city mentioned in the list.

“Mercer’s authoritative survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees. New York is used as the base city, and all cities are compared against it. Currency movements are measured against the US dollar,” a media statement said.

The survey covers 211 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

Mercer’s 2014 Cost of Living Rankings, published on July 10 2014, ranks cities based on data from the companies annual Cost of Living Survey, the most comprehensive of its kind.

“The survey helps multinational companies and governments determine compensation allowances for employees on international assignments. The survey measures the comparative cost of more than 200 goods and services in each location, including housing, transportation, food, clothing, household goods, and entertainment.”

African cities top the list of most expensive cities for expatriates according to Mercer’s 2014 Cost of Living Survey.

Although not typically recognised as wealthy cities compared to others, Luanda in Angola is the world’s most expensive city for the second year in a row followed by N’Djamena, Chad.

European and Asian cities also continue to dominate as the costliest cities with Hong Kong in third place, followed by Singapore. Zurch jumped three places to rank fifth, followed by Geneva in sixth. Tokyo dropped four spots to rank seventh.

“Rankings in many regions were affected by recent world events, including economic and political upheavals, which resulted in currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices,” said Ed Hannibal, Partner and Global Leader for Mercer’s Mobility practice.

“While Luanda and N’Djamena are relatively inexpensive cities, they are quite costly for expatriates since imported goods come at a premium. In addition, finding secure living accommodations that meet the standards of expatriates can be challenging and quite costly as well. This is generally why some African cities rank high in our survey.”

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Bern, Moscow, and Shanghai. Karachi, ranked 211, is the world’s least expensive city for expatriates, and the survey found that Luanda is more than three times as costly as Karachi.

According to Hannibal, “While multinationals continue to recognize the importance of having a global workforce and corporate assignments remain prevalent, they must be able to monitor and balance the cost of their expatriate programs. Employers need to evaluate the impact of currency fluctuations, inflation, and political instability when sending employees on overseas assignments while ensuring they retain talented employees by offering competitive compensation packages.”

Currency fluctuations and the impact of inflation on goods and services have influenced the cost of expatriate programs as well as the city rankings.

Nathalie Constantin-Métral, Principal at Mercer with responsibility for compiling the survey ranking, said, “Interestingly, several cities jumped up the list this year following large increases in both accommodation cost and demand, coupled with strong local currencies. Dhaka and Nairobi (both 117) and Dubai (67) soared thirty seven, thirty and twenty-three spots, respectively.”
varied greatly depending on the official exchange rate selected.

Four European cities remain in the top 10 list of most expensive cities. Zurich (5) is the most costly European city on the list, followed by Geneva (6) and Bern (8). Switzerland remains one of the most expensive locations for expatriates following the slight strengthening of the Swiss franc against the US dollar. Moscow (9) and St. Petersburg (35) dropped seven and twelve spots, respectively, due to a dramatic depreciation of the ruble against the US dollar.

Overall, Western European cities have all risen in the rankings mainly due to the strengthening of local currencies against the US dollar. In particular, cities in the United Kingdom and Germany experienced some of this year’s biggest surges in the ranking, with Glasgow (108) rising forty-nine places from 2013, while Aberdeen (94) and Birmingham (90) jumped thirty-four and forty-five spots, respectively.

Munich (55) rose twenty-six places from last year, Frankfurt (59) jumped twenty-four spots, and Berlin (68) soared thirty-one places from its previous ranking.  Dusseldorf and Hamburg also rose significantly.

Other cities that jumped in the ranking include Paris (27), up ten places from last year, Milan (30), up eleven spots, Rome (31), up thirteen and Vienna (32) up sixteen spots.

Constantin-Métral explained, “Despite moderate price increases in most of the European cities, European currencies for the most part slightly strengthened against the US dollar, which pushed most Western European cities up in the ranking. There have been some increases in accommodation costs, due to strong demand for rentals, which has also been behind upward movement in rankings for some European cities – most notably Copenhagen, Amsterdam, and Frankfurt.”

Most cities in Eastern and Central Europe, however, fell in the ranking as a result of local currencies depreciating against the US dollar. Prague (92), Almaty (111), and Minsk (191) fell nineteen, sixteen, and four spots, respectively, despite there being stable accommodations in these locations.

Tel Aviv (18) continues to be the most expensive city in the Middle East for expatriates, followed by Beirut (63), Dubai (67), and Abu Dhabi (68). Jeddah, Saudi Arabia, (175) continues to rank as the least expensive city in the region.

“Several cities in the Middle East experienced a jump in the ranking, as they are being pushed up by other locations’ decline, as well as the strong increase for expatriate rental accommodation costs, particularly in Abu Dhabi and Dubai,” Constantin-Métral said.

Quite a few African cities continue to rank high in the 2014 survey, reflecting high living costs and prices of goods for expatriate employees. Luanda (1) remains the most expensive city for expatriates across Africa and globally, and Ndjamena follows in second place. Victoria, Seychelles (13) is the next costliest city in Africa followed by Libreville, Gabon (19). In South Africa, Cape Town (205) fell eight places in the ranking, reflecting the weakening the South African rand has suffered against the US dollar.

(Photo of St Sofia statue: Clive Leviev-Sawyer)

 

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