In Mumbai, over the last few years, prices of expat food items such as cheese, butter, fish and meat have increased significantly besides the high cost of transportation.
Rapid economic growth, inflation in goods and services basket which moved from 4.81 per cent to 5.57 percent, and a stable Indian rupee against the dollar have had their effect. India’s financial capital is the 57th most expensive city in the world. It has climbed 25 positions since last year’s survey done by Mercer.
Living in Mumbai is far more expensive than many other European cities such as Paris (62), Vienna (78), Rome (80), Munich (98), Frankfurt (117) and Berlin (120).
Last year Paris was ranked 44 in terms of cost of living while Mumbai was at No. 82.
“Despite moderate price increases in most of the European cities, European currencies have weakened against the US dollar, which pushed most Western European cities down in the ranking,” explains Nathalie Constantin-Métral, principal at Mercer.
“Additionally, other factors such as Eurozone’s economy have impacted these cities,” she adds.
Following Mumbai is New Delhi at No.99, moved up from rank 130 in 2016, though it’s still far behind Mumbai.
In Mumbai, over the last few years, prices of expat food items such as cheese, butter, fish and meat have increased significantly. Prices for fruits and vegetables such as onions, tomatoes, lettuce and pineapple have also shown increase. Mumbai is also the most expensive city in India because of transportation costs, which includes taxi fares, cost of auto and auto parts as well as running costs.
Among other cities, Chennai is at 135, which rose in ranks by 23 spots followed by Bengaluru at 166. Kolkata at 184 is the least expensive of Indian cities, though it has climbed up in the ranking as well.
However, the rise in ranking for most Indian cities is not a result of internal factors but because some other countries have had a great fall in ranking due to currency volatility, especially in Egypt, Turkey and United Kingdom.
Ruchika Pal, India practice leader, global mobility at Mercer, says, “With a large number of Indian multinational organizations progressively expanding their footprint abroad, 71 per cent of them are expecting expatriate assignments to increase over the next two years to address business needs as well as build careers and build leaders. Meanwhile, Indian MNCs continue to send assignees largely from headquarters to subsidiaries.”
Globally, the city of Luanda in Angola is the most expensive city in the world followed by Hong Kong, Tokyo, Zurich and Singapore. And among the least expensive cities in the world are Karachi (201) and Cape Town (199), while Tunis, the capital city of Tunisia is the least expensive city to live in, in the world.
Egypt’s capital Cairo has had a major drop in ranking this year from 91 to 183, plummeting 92 spots from last year. This is due to a major devaluation of its local currency.
“Compensation is important to be competitive and must be determined appropriately based on the cost of living, currency, and location,” says Ilya Bonic, senior partner and president, Mercer’s career business.
The survey includes more than 400 cities across five continents and measures the comparative costs of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.