MercoPress. South Atlantic News Agency

Montevideo remains the most expensive city in the region

The Uruguayan capital ranked 42nd in the world according to Mercer's list released this week

Montevideo remained South America's most expensive place to live according to the Mercer Ranking released this week, closely followed by Buenos Aires, a place that has been moving up fast since President Javier Milei's Dec. 10, 2023, inauguration. The list helps multinational employers plan their strategies regarding compensations and other expenses, it was explained. Hong Kong stayed at the top, followed by Singapore, and Sitzerland's Zurich, Geneva, and Basel.

Mercer's “Cost Of Living Survey” takes into account the evolution of prices in a basket of more than 200 vital inputs for the quality of life of executives, mostly expatriates who bring their families abroad. These items include housing, transport, food, clothing, household goods, and entertainment in 227 cities on five continents.

Rising housing costs are playing an increasingly key role in international developments. “Inflation is also eroding purchasing power and putting additional pressure on compensation packages. These factors can make it difficult for employers to attract and retain top-tier talent, and can increase compensation and benefits expenses, limit talent mobility, and increase operating costs,” Mercer also noted.

According to Mercer's Global Mobility expert Yvonne Traber, “the cost of living crisis has had a significant impact on multinational organizations and their employees.”

“It is important for organizations to stay informed about cost of living trends and inflation rates and seek employee feedback on these issues to effectively manage their impact,” she added.

“High costs of living can require assignees to adjust their lifestyles, reduce discretionary spending, and even struggle to meet their basic needs,” Traber also said.

“To offset these challenges, employers can offer compensation packages that include allowances or housing allowances, provide support services, and explore alternative talent search strategies,” the expert went on.

Among South American cities, Montevideo ranked 42nd globally followed by Buenos Aires (77th) while Santiago (Chile) fell to 160th place and sixth in the region. São Paulo moved up 28 notches worldwide to stay the most expensive city in Brazil, where a total of five cities were listed by Mercer: Rio de Janeiro (150th), Brasilia (179th), Manaus (182nd), and Belo Horizonte (185th). Lima (Peru) moved up one berth to 166th and Colombia's Bogotá ranked 174th.

In Mexico, the Federal District (DF) climbed to the 33rd spot from the 79th in 2023, and Monterrey was 115th after finishing 155th last year. US and Canadian cities excluded, Nassau in The Bahamas remained the most expensive city in the Americas, even above the DF.

“With price increases around the world and the devaluation of some currencies against the dollar, having a structured compensation package is critical to equalize and guarantee the purchasing power of the transferred employee, hence the importance for organizations to stay informed about the cost of living trends and seek the opinion of specialists to effectively manage their impact and remain competitive,” Mercer's Inaê Machado noted.

This year's rankings do “not necessarily mean that prices in Santiago have fallen, but that the increase in other cities has been greater,” Career Leader at Mercer Chile Agustina Bellido explained.