Karachi and Islamabad were ranked the least expensive cities for expats by Mercer’s recent Cost of Living City Ranking, 2023, while Hong Kong, Singapore and Zurich named the most expensive for international employees this year.

This year’s ranking included 227 cities from across five continents.

Mercer – a management consulting firm – measured the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment, while currency movements were measured against the US dollar.

The least expensive locations in the ranking include Havana, which dropped 83 spots, due in part to strong currency devaluations mid last-year, and two cities in Pakistan, Karachi that sits at 226, down three places from last year, and Islamabad (227).

Dushanbe, Tajikistan and Bishkek, Kyrgyzstan were ranked higher than the above cities sitting at 223 and 224 respectively.

Pakistan’s economic crisis that has come in tandem with rupee’s massive depreciation against the US dollar have contributed to this low ranking.

However, citizens within Pakistan are facing runaway inflation that hit a record high of 38% last year in May. It has since eased, but low demand and economic growth mean the crisis is far from over.

Karachi ranked 918th out of 1,000 in Oxford Economics’ Global Cities Index

Geneva, Basel and New York City came in fourth, fifth and sixth place, respectively, while Copenhagen and Nassau (Bahamas) rounded off the top 10.

Dubai moved up 13 spots and now sits in 18th place, no doubt owing to its speedy recovery post-Covid and the influx of high-net-worth individuals looking to park their wealth in the glitzy gulf.

This has also resulted in surging real estate prices.

Last year, Dubai ranked first globally for number of home sales above $10 million, selling nearly 80% more such properties than second-placed London, according to Knight Frank data.

Karachi ranked fifth worst livable city in new index

Meanwhile, Abu Dhabi moved up 18 places to sit at 43.