MercoPress. South Atlantic News Agency

Low cost of living in most Mercosur cities

Mercosur capitals figure in the lower half of the world's most expensive cities according to a biannual The Economist Intelligence Unit study which has Oslo, Norway top of the list and Teheran, Iran ranking as the cheapest.

The EIU produces the index as a guide for companies in calculating executive pay in 130 cities around the world.

More than 100 goods and services, from babysitter rates and soap to deluxe cars and restaurant meals, were used to calculate the weighted index.

In the latest edition Oslo rated 140 pushing Tokyo's 136 from the top of the rank for the first time in fourteen years with the Icelandic capital, Reykjavik, coming third at 135.

In Mercosur cities Santiago de Chile stands in position 84, followed by Sao Paulo and Rio do Janeiro, 87; Montevideo, Uruguay 100; Lima, Peru, 107; Caracas, Venezuela, 112; Buenos Aires 117 and Asunción, Paraguay, 124. However the biggest two jumps are in Brazil with Rio and Sao Paulo climbing 22 places compared to the previous rating, pushed by a 25% rise in the currency and consumer prices.

Mexico City figures as the most expensive city in Latinamerica ranking 57, followed by Ciudad de Guatemala 67. Bogotá, Colombia ranks 84 and Panama City 95.

"Norway has seen strong economic growth following a recovery in 2004, enjoying high consumer confidence, rampant investment and still-low interest rates'' the EIU said.

"Despite spending so long at the top, the displacement of Tokyo comes as little surprise. A gradually weakening yen has been compounded by years of low inflation and deflation".

Japan's consumer prices had their first back-to-back gain since April 1998, with core prices excluding fresh foods rising 0.1% year on year in both November and December the country's statistics bureau said Jan. 27.

Eight of the 10 most expensive cities in the survey, (among which Paris and London) and 20 of the first 30, are in Western Europe. New York, in 27th place, is ranked as the most expensive U.S. city, followed by Chicago in 35th and Los Angeles in 36th.

The EIU also shows New Zealand's major cities edging their way up the list of the world's most expensive places to live: Auckland is the 29th most expensive city and Wellington the 32nd.

In Latinamerica two cities, --Quito and Panama City-- actually saw the cost of living drop because Ecuador and Panama have the US dollar as their currency. In Asunción, Paraguay the region's cheapest city, the cost of living is 45% of New York City.

On the contrary the rise of Oslo and other European cities partly reflects the long-term underperformance of the US currency.