Bucharest, least expensive city

Bucharest is the least expensive European city in terms of cost of living in 103rd place worldwide, a ranking of the most expensive cities devised by Mercer Human Resource Consulting shows.

The 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.

The data are used to help multinational companies and governments determine compensation allowances for their expatriate employees. The ranking was put together in March.

The authors say that the ranking has seen a series a changes from last year, largely due to the fluctuation of the euro and of the dollar.

“Currency fluctuations and exchange rates can have a huge impact on how much expatriates receive and what they can buy with that money. The challenge for multinational companies is to ensure their expatriate compensation packages remain fair and attractive enough to retain key employees, while making sure they do not pay over the odds and find themselves at a competitive disadvantage,” commented Yvonne Sonsino, partner at Mercer.

She added that as lower-cost countries attracted more and more investments, the gap between them and the “expensive” countries appeared to be closing.

Tokyo remains the world”s most expensive city, followed by Osaka, which ranked third last year. London moves down one position in the rankings to take third place, followed by Moscow, which also drops a place this year.

World”s most expensive cities include Geneva (6th), ZŸrich (7th), Copenhagen (8th) and Oslo (which climbed from 15th to 10th).

As for Europe, a major change regarding the cities in the new European Union members has occurred, as they have risen by nearly ten places. Budapest, for instance, ranked 34th last year and climbed up to 24th this year. This is happening because these cities “make strides to bring their economic infrastructure up to EU standards. Central and Eastern Europe are becoming increasingly attractive for investment by multinationals,” commented Marie-Laurence Sepede, research manager at Mercer.