Ashgabat, capital city of the Central Asian nation of Turkmenistan, has been named the world’s most expensive city for expats for a second year running according to ECA’s annual cost of living survey.
The city rocketed up from 146th in 2017 and has remained at the top spot since due to a combination of high inflation and a black-market currency rate which is far weaker than the official exchange rate, therefore making purchases particularly expensive for expatriates in their home currency unless they can access the illegal black market exchange rate.
“Future relative living costs in Turkmenistan could potentially follow the same trajectory we are currently seeing in Angola,” says Lee Quane, Regional Director of Asia for ECA International. “The once booming oil-based economy of the Angolan capital, Luanda, which topped the rankings in 2017’s Cost of Living Survey has continued to fall, dropping 50 places to 92.
“Much like Turkmenistan’s declining gas exports a decline in oil production in the country as prices fell after 2014 has contributed to a fall in the value of the kwanza, which despite high inflation has resulted in cheaper living costs for expatriates. With the currency devaluing again since the September survey, Luanda is set to fall even further down the rankings by the next survey.”
Tokyo was found to be the second most expensive city for expats in Asia, ahead of Hong Kong, which for many years topped the global rankings.
“Hong Kong’s place in the rankings has remained stable this year with the city continuing to be the sixth most expensive location in the world for expatriates” said Quane. “Despite the ongoing socio-political upheavals and the fact that the economy is in recession, we have yet to see a real impact in the cost of living in the city. Indeed, Hong Kong has only been overtaken by Tokyo due to the strong performance of the Japanese yen throughout 2019, which has moved many Japanese cities up the rankings.
“Furthermore, we expect prices in Japan to increase further owing to the recent increase in consumption tax while next year’s Olympics in Tokyo are likely to have further inflationary effects. As such, we expect Tokyo to remain above Hong Kong into 2020.”
In spite of the impact of Swine Flu on pork prices, many Chinese cities surveyed by ECA have fallen slightly in the rankings. This is mainly due to weakness of the yuan against major currencies in the past 12 months.
Article published 13th December 2019