Monday, June 26, 2006

Moscow is most expensive city

A worldwide cost of living survey has found Moscow to be the most expensive city in the world. Mercer Human Resource Consulting has released the findings of its 2006 survey which ranks living expense in 144 cities worldwide. This year, Moscow replaces Tokyo as the world's most expensive city while Asuncion, Paraguay claims the lowest cost ranking.

The first article I read about the survey mentioned that cost of living in two Brazilian cities, Sao Paulo and Rio de Janiero, had risen sharply (according to their jump in the survey rankings). I wondered if this was due to the Brazilian currency's recent strength against the dollar or some type of goods shortage. Mercer's press release put it down to the following factors:

Sao Paulo and Rio de Janeiro are the most expensive cities in Latin America moving up from 119th and 124th positions to 34th and 40th place respectively. These movements are due to the strong appreciation of the Brazilian Real against the US dollar (more than 20 %), which has occurred as a result of solid economic growth and increased foreign investment over the last two years, together with reduced public debt and high interest rates. In particular, the cost of international-standard accommodation has risen significantly in these cities.

The relationship between the US dollar and foreign currencies played a major role in moving cities up or down in the rankings. A strengthening currency and high accommodation costs for expatriate workers seem to be the most visible factors in moving cities up the expense pole.

Both seemed to have played a role in Moscow's rise to the top spot, as the St. Petersburg Times reports that the ruble has gained 6.5 percent against the US dollar this year.