Ashgabat in Turkmenistan is the surprise entry as the most expensive city in the world for international employees, pushing Hong Kong to second place, Mercer's latest 2021 Cost of Living City Rankings has revealed. 

Beirut ranked third, climbing 42 positions up the ranking as a result of a severe and extensive economic depression due to the escalation of several crises — the country's largest ever financial crisis, COVID-19 and the Port of Beirut explosion in 2020.

Tokyo and Zurich each dropped one spot from third and fourth respectively to fourth and fifth positions, and Shanghai ranked sixth, up one place from last year. Singapore moved from fifth place to seventh.

Other cities appearing in the top 10 of Mercer's most costly cities for international employees are Geneva (8), Beijing (9), and Bern (10). The world's least expensive cities for international employees, according to Mercer's survey, are Tbilisi (207), Lusaka (208), and Bishkek, which ranked as the least costly city at 209.

Americas

Cities in the US have dropped in this year's ranking mostly due to currency weakness between March 2020 and March 2021, despite the rising inflation of goods and services in the country. New York (14) ranked as the most expensive city in the US, though it dropped eight positions since last year, followed by Los Angeles (20), San Francisco (25), Honolulu (43) and Chicago (45).

Winston Salem (151) remains the least expensive US city surveyed. San Juan (89) dropped 23 positions due to deflation in the second part of 2020 and a very low inflation in the beginning of 2021 hence affecting the position in the ranking.

The Canadian dollar rose against the USD, largely as a result of stronger commodity prices, triggering jumps in this year's ranking. Vancouver (93) is the most expensive Canadian city in the ranking, followed by Toronto (98) and Montreal (129). Ranking 156, Ottawa is the least expensive city in Canada.

In South America, Port of Spain (91) ranked as the most expensive city, followed by Port-au-Prince (92) and Pointe-à-Pitre (107). Brasilia (205) is the least expensive city in South America.

Europe 

Three European cities are among the top 10 list of most expensive locations. Number five in the global ranking, Zurich remains the most costly European city, followed by Geneva (8) and Bern (10).

The strengthening of local currencies resulted in several European cities climbing in the ranking, with Paris climbing to 33. The United Kingdom remained steady with London (18) & Birmingham (121) rising one and eight places, respectively.

"UK cities have remained relatively stable in the ranking this year, due to low inflation and the fact the Pound has remained strong against all major currencies during the pandemic," said Kate Fitzpatrick, Mercer's Global Mobility Practice Leader for the UK & Ireland.

"While there has been limited cross-border mobility over the last 12 months due to the travel restrictions associated with COVID-19, organisations are now beginning to plan for a revival of activity. While the mix of permanent transfers, long and short term assignments, business travellers, and international remote workers has changed, the need for - and indeed the desire of - employees with valuable and in-demand skills to mobilise remains strong.

"The cost and quality of living a city has to offer is directly tied to its attractiveness as a place to live and work. Multinational employers monitor our data closely and over time to ensure they can offer compensation packages to an internationally mobile talent pool which are fair and globally competitive."

The Middle East and Africa 

The United Arab Emirates continued to diversify its economy, which reduced the impact of the oil industry on GDP. With this ongoing process, there has been negative price movement in both Dubai (42) and Abu Dhabi (56). Beirut is the costliest city in the Middle East for international employees, jumping 42 positions to third in the global ranking. N'Djamena (13), Lagos (19) and Libreville (20) are first, second and third costliest cities in Africa for international employees. Lusaka, ranked 208, is the least costly city in Africa.

Asia Pacific

More than half of the top 10 most expensive cities are located in Asia. Ashgabat climbed one position in this year's ranking, making it the costliest city for international employees, both in Asia and globally. Hong Kong (2), Tokyo (4), Shanghai (6), Singapore (7) and Beijing (9) followed suit. Mumbai (78) is India's most expensive city but dropped 18 places in this year's ranking due to a relatively weak Indian rupee in comparison with other cities in the ranking.
Australian cities have climbed in this year's ranking as the local currency rose against the USD. Sydney (31), Australia's most expensive ranked city for international employees, experienced a climb of 35 places, followed by Melbourne (59) with a climb of 40 places.

Mercer's uses New York City is used as the base city for all comparisons and currency movements are measured against the US dollar. The survey includes over 400 cities throughout the world; this year's ranking includes 209 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.

The data collected provides all of the key elements employers need to design efficient and transparent compensation packages for international assignees. 

The figures for Mercer's cost of living and rental accommodation cost comparisons are derived from a survey conducted in March 2021. Exchange rates from that time and Mercer's international basket of goods and services from its Cost of Living Survey have been used as base measurements.