Karachi and Islamabad have been named the least expensive cities for expatriates in Mercer’s 2023 Cost of Living City Ranking. In contrast, Hong Kong, Singapore, and Zurich topped the list as the most expensive cities for international employees.
Key Highlights of Mercer’s 2023 Cost of Living City Ranking
- Cities Surveyed: 227 cities across five continents
- Most Expensive Cities: Hong Kong, Singapore, Zurich
- Least Expensive Cities: Karachi (226th), Islamabad (227th)
Mercer, a leading management consulting firm, evaluated the cost of over 200 items in each city, including housing, transportation, food, clothing, household goods, and entertainment. The study also considered currency movements against the US dollar.
Least Expensive Cities in 2023
| Rank | City | Country |
|---|---|---|
| 223 | Dushanbe | Tajikistan |
| 224 | Bishkek | Kyrgyzstan |
| 226 | Karachi | Pakistan |
| 227 | Islamabad | Pakistan |
Factors Influencing Rankings
The economic crisis in Pakistan and the significant depreciation of the Pakistani rupee against the US dollar have been major contributors to the low cost of living for expats in Karachi and Islamabad. Despite these rankings, local residents in Pakistan face severe inflation, which reached a record high of 38% in May last year. Although inflation has since eased, the economic challenges persist due to low demand and growth.
Most Expensive Cities in 2023
| Rank | City | Country |
|---|---|---|
| 1 | Hong Kong | China |
| 2 | Singapore | Singapore |
| 3 | Zurich | Switzerland |
| 4 | Geneva | Switzerland |
| 5 | Basel | Switzerland |
| 6 | New York City | USA |
| 10 | Copenhagen | Denmark |
| 10 | Nassau | Bahamas |
Dubai has seen a significant rise in the rankings, moving up 13 spots to 18th place, driven by its rapid post-COVID recovery and the influx of high-net-worth individuals, which has also led to a surge in real estate prices. Dubai ranked first globally last year for the number of home sales exceeding $10 million, surpassing London by nearly 80%.
Additional Rankings
- Karachi: Ranked 918th out of 1,000 in Oxford Economics’ Global Cities Index.
- Karachi: Ranked fifth worst livable city in a new index.
Meanwhile, Abu Dhabi has also moved up the rankings, climbing 18 places to 43rd.
Conclusion
While Karachi and Islamabad are considered cost-effective for expatriates, the local population continues to grapple with economic instability and high inflation. The contrast between the cost of living for expats and the financial challenges faced by residents highlights the complex economic landscape in Pakistan.
