The cost of living for expatriates in Hanoi and Ho Chi Minh City is now higher than every other ASEAN city excluding Singapore, said a survey by consultants at Mercer.
The survey released Thursday said the cost of living ranking of Hanoi and Ho Chi Minh City moved up significantly to 58th in the world from 91st and 69th from 100th respectively between March 2008-March 2009.
In the Mercer survey cost of living indices, New York is used as the base city for the index and scores 100 points and all cities are compared against the city while currency movements are measured against the US dollar.
The Vietnamese dong has weakened slightly against the US dollar, which gained almost 9 percent, Mercer said. Inflation in Vietnam has been higher than the base city, according to the survey.
This has pushed Hanoi and HCMC up through the ranking table again despite a small decrease in their cost of living indices.
The index in Hanoi decreased to 77.7 from 79 and HCMC to 74.9 from 76.3 in the period, according to the survey, which covers 143 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 costs in the two cities were the second and third highest in Association of Southeast Asia Nations after Singapore, the 10th most expensive city in the world, according to the survey conducted by Mercer, a global provider of advice and market data on international and expatriate compensation management.
Malaysia’s Kuala Lumpur ranks in the 96th position with Thailand’s Bangkok at 98th and the Indonesian capital of Jakarta following in 106th place. Manila rounded off the major ASEAN cities at 126th place, according to the survey.
With a score of 143.7 points, the Japanese capital of Tokyo has knocked Moscow, Russia, off the top spot to become the world’s most expensive city for expatriates, nearly three times as costly as South African Johannesburg, the cheapest with an index score of 49.6.
Osaka is in second position, up nine places since last year, whereas Moscow is now in third place.
New York is a new entry in the top 10, jumping from 22nd to 8th place, along with Beijing now in 9th place, up from 20th in 2008.
London and Oslo, both previously in the top 10, dropped 13 and 10 places, respectively.
“As a direct impact of the economic downturn over the last year we have observed significant fluctuations in most of the world’s currencies, which have had a profound impact on this year’s ranking,” said Mercer’s senior researcher Nathalie ConstantinMétral.
Constantin-Métral said with significant exposure to multiple economies and currencies, multinational companies continue to be greatly affected by the financial crisis.
The cost of expatriate programs is heavily influenced by currency fluctuations and inflation rates.
Now that cost containment and reduction is at the top of most company agendas, keeping track of the change in factors that dictate expatriate cost of living and housing allowances is essential, the researcher added.
Source: thanhnien