The city of Kinshasa, in the Democratic Republic of the Congo, is the world’s most expensive location for expats, mainly due to currency changes, new research shows.
All expats know that their living costs are likely to be affected by currency fluctuations at some point and in the case of Kinshasa it is due to the Congolese Franc appreciating against most major currencies around the world and in particular the Swiss Franc.
The latest cost of living survey from employee management firm ECA International shows that Kinshasa tops the global 2016 rankings but this may not last with the Congolese economy and the currency under pressure from falling commodity prices, especially copper and cobalt.
“The cost of importing and transporting items, commonly purchased by international assignees in this location, is high due to poor infrastructure, corruption and the ongoing risk of conflict in the area,” said Steven Kilfedder, ECA International manager for Cost of Living and Remuneration Services.
This year’s survey also shows that Hong Kong now the second most expensive location for expats in Asia and ninth globally. Again, this is due to currency as during the past 12 months the Hong Kong dollar appreciated against most currencies contributing to Hong Kong’s rise in the rankings.
The Japanese locations covered by the survey all moved back into the global top 15 most expensive cities with Tokyo once again the most expensive location in Asia, rising from seventh in the regional rankings last year.
“The appreciation of the yen in recent months against other major currencies is a significant reason for this rise in the rankings. This means that for many companies, the cost of maintaining their assignees’ purchasing power while posted there has increased,” said Lee Quane, ECA International regional director for Asia.
Shanghai, which was ranked as the most expensive location for expats in the Asia Pacific region a year ago, has moved down two places to the third most expensive. Within China, Shanghai at 10th globally is just ahead of Beijing at 11, Guangzhou at 15th and Shenzhen at 24.
Indeed, 11 of the 14 Chinese cities included in the rankings dropped positions in the global rankings this year. However, all 14 ranked Chinese cities still rank in the global top 50 most expensive locations for expatriates.
“We have seen a small depreciation of the renminbi against the yen and HK dollar over the past year, this has led to Shanghai and Beijing falling below Tokyo and Hong Kong in the rankings,” explained Quane.
“However, this does not truly reflect the general trend seen in China over the past five years with locations in mainland China averaging a 54 place increase in the global rankings over this time period. It is likely that major Chinese cities will remain expensive destinations for mobile executives for the foreseeable future,” Quane added.
Overall Singapore has remained relatively stationary in the Asia Pacific regional rankings, moving down to 10th position from ninth last year, it has climbed one place to 18th position on the global stage.