MercoPress. South Atlantic News Agency

Buenos Aires and Montevideo among cheapest cities

Moscow has replaced Tokyo as the world's most expensive city, according to the latest Cost of Living Survey from Mercer Human Resource Consulting. Seoul is in second place, climbing three places since last year and Tokyo moves down two positions in the rankings to take third place, followed by Hong Kong.

Asuncion in Paraguay remains the least expensive city in the survey. Buenos Aires, Montevideo and Caracas are also relatively cheap cities.

With New York as the base city scoring 100 points, Moscow scores 123.9 and is nearly three times costlier than Asuncion, which has an index of 43.5.

Mercer's survey covers 144 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world's most comprehensive cost-of-living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees.

There have been some significant changes in the rankings this year which are primarily due to exchange rate fluctuations, in particular the strengthening of the US dollar.

Moscow is the most expensive city in Europe and in the rest of the world, with a score of 123.9. "Steep accommodation costs have contributed to the city's high ranking, as the recent property boom has driven up rental prices for expatriates," said Anna Krotova, Senior Researcher at Mercer.

London is the second most expensive city in Europe and ranks in 5th position (score 110.6). "While prices have actually increased slightly over the last year, the strengthening of the dollar against the pound means London has dropped two places since last year," said Ms. Krotova.

Other costly European cities include Geneva in 7th place (103), Copenhagen in 8th (101.1) and Zurich in 9th (100.8) - all have been pushed down one place this year. Oslo remains in 10th place with a score of 100 while St. Petersburg is in 12th position (99.7).

Leipzig is Europe's cheapest city in 123rd position with a score of 68.1.

In the Americas, New York remains the most expensive city in North America and climbs three places to 10th position (score 100). Currency appreciation is the main reason for this, although price increases in fuel and certain consumer goods have also contributed to New York's rise in the rankings. Other high-ranking cities include Los Angeles in position 29 (86.7), San Francisco in 34th place (85) and Chicago in 38th position (84.1). Washington DC takes 83rd place (77). Winston Salem is the cheapest US city surveyed, ranked 124th (66.7).

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.

Asuncion in Paraguay remains the least expensive city globally, in 144th position with a score of 43.5. Other cheap cities include Buenos Aires, Montevideo and Caracas in 142nd place (score 54.8.), 138th (56.5) and 136th (57.2) respectively.

While in Buenos Aires renting an apartment can cost 1.000 US dollars and a cup of coffee 1.47 US dollars, in Moscow the prices are 3.000 and 5.27 US dollars.

Three of the world's ten costliest cities are in Asia, with Seoul moving up from 5th to second place. While Tokyo has lost its title of the world most expensive city because of currency fluctuations between the Japanese Yen and the US dollar, it still ranks highly and takes third place. Hong Kong is in 4th position.

"Chinese cities have moved up slightly in the rankings as the value of the Yuan renminbi is now pegged to a number of currencies rather than just the US dollar," said Ms Krotova. Beijing is in position 14 (score 94.9) followed by Shanghai 20th (91.2).

Auckland and Wellington have dropped in the rankings this year to positions 100 and 105 respectively (scores 72.9 and 71.1) due to the significant devaluation of the New Zealand dollar against the US dollar. Sydney is still the most expensive city in the region at 19th place with a score of 91.3. Melbourne occupies 74th place (78.8) while Brisbane is in 99th position (73.2).

The figures for Mercer's cost of living comparisons are based on a survey conducted in March 2006. The 2006 comparisons are based on a similar survey conducted in March 2005. The information is used by governments and major companies to protect the purchasing power of their employees when transferred abroad. The choice of cities surveyed is based on the demand for corresponding data from companies and governmental organizations. Exchange rates used in cost comparisons: 1 £ = 1.75 USD; 1 £ = 1.46 EUR.