Romanian capital Bucharest is cheaper for expats in the most recent Mercer ranking than in 2011,  ranked at 176 out of 2014 this year, falling from 152 in 2011. Life for expats in Bucharest is among the cheapest in the world, and among the cheapest in Eastern Europe, the study shows.  Bucharest is more expensive than Sofia, Sarajevo and Skopje but cheaper than the rest of the Eastern European capitals.

Eastern European cities are still cheap compared to Western Europe for expatriates, despite the economic challenges, and most capitals in the region have fallen in the ranking since 2011. Budapest is now in 142nd position, from 113th in 2011, Istanbul is 79th, from 70 in 2011. When compared to New York, Mercer's benchmark city for the study, most European cities have witnessed a decline in the cost of living.

Tokyo is the world’s most expensive city for expatriates, pushing Luanda, Angola, down to second position, according to Mercer’s latest Cost of Living Survey. Osaka is in third position, up three places from last year, whereas Moscow remains in fourth and Geneva in fifth positions. Luanda's, and other African cities', positions high in the chart are explained by difficulties in finding good, secure accommodation for expatriates. Thus the limited, acceptable accommodation is duly expensive. The cost of imported international goods is also high in Africa.

Karachi in Pakistan is ranked as the world’s cheapest city for expatriates, less than one-third as expensive as Tokyo. At number four in the global ranking, Moscow remains the most expensive city in Europe for expatriates. Geneva follows in fifth position and Zurich in sixth (up one place from last year).

The survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including transport, food, clothing, household goods and entertainment. The cost of housing is also included and, as it is often the biggest expense for expatriates, it plays an important part in determining where cities are ranked. New York was used as the base city and all cities are compared against it. Currency movements are measured against the US dollar.

“Deploying expatriate employees is becoming an increasingly important aspect of multinational companies’ business strategies, including expansion. But with volatile markets and stunted economic growth in many parts of the world, a keen eye on cost efficiency is essential, including on expatriate remuneration packages. Making sure salaries adequately reflect the difference in cost of living to the employee’s home country is important in order to attract and retain the right talent where companies need them,” said Nathalie Constantin-Métral, Principal at Mercer.

editor@romania-insider.com