The ongoing Russo-Ukrainian conflict has had far-reaching consequences on the global economy, with the ripple effects strongly felt by emerging economies.
Amid this turbulence, inflation continues to rise worldwide.
Amidst these economic fluctuations, Mercer, a U.S. consulting firm, has released an updated ranking of the most and least expensive cities for international workers – those employed overseas in strategic roles for their companies.
“The ranking shows that in Latin America, local currencies that have maintained their value against the reference currency (U.S. dollar) have ascended, making those cities costlier for international employees,” explained Zulma Santamaria, a senior talent consultant for Mercer in Colombia, Central America, and the Caribbean.
The study using New York City as a comparison benchmark revealed that Bogotá (Colombia) and Santiago de Chile (Chile) are the most affordable cities for international workers, ranking 214 and 87, respectively.
On the contrary, in Latin America, Nassau (Bahamas) was 10th globally, followed by San Jose (63), Buenos Aires (45), Montevideo (54), and Mexico City (79).
Santamaria remarked that despite Colombia’s high inflation rate (13.12% at the end of 2022), the peso’s devaluation against the dollar makes it easier to acquire goods and services.
The study noted that besides offering a conducive work environment for these workers, Bogotá also provides a compelling cultural and tourist appeal.
Amalia Suaste, mobility leader for Mexico and Co-Leader of Mercer’s LatAm Center of Interest, advised a more adaptive thinking approach, emphasizing data-driven decision-making.
She noted that a mobility policy should provide a clear management logic and clarify available options in tune with the changing workplace dynamics.
The cost of living, however, is not the only factor influencing the rankings.
The quality of life, potential risks, natural disasters, political and/or economic unrest, high crime rates, poor infrastructure, and limited international connectivity also play significant roles.
In the global context, only two Asian cities – Hong Kong (1) and Singapore (2) – are among the top 10 most expensive cities for international workers, down from four last year.
Conversely, the two least expensive cities in Asia are Karachi (226) and Islamabad (227).
Europe has five cities in the top 10, with four from Switzerland and Copenhagen as the fifth.
The consultancy concluded that inflation and exchange rate fluctuations directly impact internationally mobile employees’ pay and savings due to domestic monetary policies and tightening global financial conditions.
With information from Bloomberg