Caracas of Venezuela has been ranked the most expensive city in the world, according to the latest ECA International Cost of Living Survey – but it could also be the cheapest, if you use a different currency.
The reason for this rather bizarre state, ECA said, is because Venezuela’s official fixed exchange rate greatly overvalues the bolivar, making Caracas by far the most costly in the world for the second year running for companies paying expatriates on that basis.
“However, expatriates now have access to the much fairer and better value Sicad 2 rate, introduced to enable a more regular supply of US dollars to importers at an exchange rate much closer to the black-market rate.”
“When this rate is applied the cost of items in ECA’s basket of goods and services plummets and Caracas becomes the cheapest city in the world for expatriates,” the group said.
ECA carries out two main cost of living surveys per year to help companies calculate cost of living allowances so that their employees’ spending power is not compromised while on international assignment. The surveys compare a basket of like-for-like consumer goods and services commonly purchased by assignees in over 440 locations worldwide.
For the second year in a row, Luanda was ranked as Africa’s most expensive location for expatriates and the 2nd most expensive in the world.
The Angolan capital is followed by Juba (9th globally) and Kinshasa (13). Maseru in Lesotho, ranked 262nd globally, remains the region’s cheapest location for expatriates.
Oslo, Norway, ranked third globally, tops the list of Europe’s most expensive location for expatriates.
Locations in Australia have risen in the ranking although are still below the highs they reached a couple of years ago. Sydney is in 29th place.
The Israeli city, Tel Aviv, is the most expensive Middle Eastern location surveyed and ranks 24th globally.
Top 25 most expensive cities in the world
ECA International’s cost of living indices are calculated based on surveys carried out annually in March and September, using a basket of day-to-day goods and services:
- Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables;
- Basic: Drink and tobacco; miscellaneous goods; services;
- General: Clothing; electrical goods; motoring; meals out;
The data represented in this article refers to year-on-year movements between ECA’s September 2013 and 2014 surveys.