According to a study by the ECA International personnel consultancy, the worldwide financial crisis severely affects the living quality of employees working abroad. This study revealed unexpected shifts in certain city rankings. Thus, life is currently more expensive in Munich than in London which is known for extremely high prices. The most expensive city in Europe is Moscow which replaced Oslo in this respect.
According to the ECA experts, the main reason for less expensive living conditions in the Norwegian capital are smaller oil prices which weaken the Norwegian currency. Great Britain is also affected by a weaker currency which leads to London (rank 72nd) currently being less expensive than Paris (20th) and Munich (34).
Living costs worldwide
Berlin ranks 28th in this list and is therefore Germany’s most expensive city. The world’s most expensive city is the capital of Angola (Luanda), followed by Tokyo and Yokohama. The biggest jump in this list was made by Caracas, the capital of Venezuela (from rank 128 to rank 18). An inflation rate of 40% and a strong national currency make living for foreigners in this city currently 42% more expensive than in September 2007. The world’s least expensive city is Maseru in the African country Lesotho.
In Germany the most expensive city for expatriates is Berlin (28th) followed by Munich (34), Dusseldorf (44), Stuttgart (49), Hamburg (53) and Frankfurt (57).
Living costs in Europe
Living in London became by 9% less expensive over the past year. Last year London ranked 10th in this respect and this year just 72nd. At the same time American cities have become more expensive as a consequence of a stronger US dollar: two months ago Munich e.g. was 4% more expensive to foreign businessmen than Manhattan. Today living in Manhattan is 10% more expensive than in the Bavarian capital.
According to ECA International, companies normally pay their expatriates in the currency of their home country. This means, for instance, for German businessmen sent to the USA that their salaries significantly decreased over recent months. Therefore businesses should pay attention to exchange rate changes and, if necessary, react to them in order to duly remunerate their expatriates, said Mr. Mira Pathak, Business Development with ECA International.