ECA International Resources, a human resources firm, has ranked Zimbabwe’s capital Harare the world’s most expensive city for expatriates in 200
The human resources firm attributed Harare’s position to the soaring inflation rate which is the highest in the world at 1 070% for October.
The survey measures the day-to-day expenses for expatriates but does not include certain living costs such as accommodation, utilities and school fees which are often included as part of an expatriate’s package.
“Zimbabwe had massive inflation,” ECA International general manager, Lee Quane said.
“Although the currency has depreciated, there was a huge increase in the cost of living for Harare,” he said.
Harare is in pole position as the most expensive city in the world for expatriates out of 125 cities surveyed. Last year it was ranked number 57 out of 125 cities.
The ECA International Resources’ cost of living survey takes into account 125 economic factors such as the cost of luxury goods, restaurant meals, movement of prices and grocery costs for items commonly purchased by expatriates in over 250 locations worldwide.
Apart from rising inflation analysts said the situation in Harare is made worse by the limited foreign currency availability, declining productivity, and low industrial capacity caused by company closures.
ECA said rich African countries climbed up the world rankings due to a commodities boom, with Angola’s Luanda and the Congo Democratic Republic’s Kinshasa in second and fifth place respectively, while Scandinavian cities Oslo and Copenhagen remained among the top seven.
Seoul, which was the most expensive city in Asia is ranked eighth-most expensive worldwide, up from tenth place in the previous year. Cities in Japan fell in the global rankings mainly because of a sharply weaker yen, with Tokyo dropping to tenth place this year from third place in 2005.
“Taiwan, Tokyo and Hong Kong have all fallen due to currency movements, even though the price of goods and services has actually increased,” said Quane.
Consumer prices in Japan are expected to keep rising, but only slowly, following more than seven years of deflation.
However, costs in both Seoul and Singapore were higher due to stronger currencies. The won has gained more than 9% since the end of 2005 against the US dollar while the Singapore dollar has risen nearly 8%.
Quane said Seoul, which took the top spot as Asia’s most expensive city for expatriates for the second year in a row, had seen a double-impact from a stronger currency and higher costs of goods and services.
“High oil prices haven’t really had a huge inflationary effect,” he said.
* Following are this year’s 10 most expensive cities with positions for 2005 in brackets: Harare, Zimbabwe (57); Luanda, Angola (2); Oslo, Norway (1); Moscow, Russia (8); Kinshasa, Democratic Republic of Congo (15); Stavanger, Norway (5); Copenhagen, Denmark (7); Seoul, South Korea (10); Libreville, Gabon (12); and Tokyo, Japan (3).