If someone could work from anywhere on the planet, which destination would they pick? It sounds straightforward when costs are low, yet the question is inherently relative. Quality of life, daily routines, and even food culture all sway the choice. Understanding living costs in major cities helps distinguish one option from another. In this vein, Mercer published a global league of 227 cities, ranking them from most to least expensive and comparing the results with the previous year. Madrid and Barcelona sit inside the top 100, with Madrid at 83 and Barcelona at 75. They stand as Europe’s prominent examples of price resilience, ranking third and seventh in the 2022 edition. Hong Kong, Singapore, and Zurich remain the priciest, while Havana, Karachi, and Islamabad sit at the opposite end of the spectrum.
“Madrid and Barcelona retain strong appeal,” notes Mercer, adding that although inflation has touched many European markets, both cities have managed to keep price growth in check since the start of the year. As context, Spain has one of the EU’s lowest inflation rates, dipping to around 3.2% in May, according to recent data.
Shopper costs have been driven up by inflation across analyzed markets, with food and essentials showing notable increases. In Madrid, basic staples were particularly affected: sugar rose by more than 80% in 2022, followed by butter (about 61%), oil (roughly 43%), and the overall basket (around 27%). The only notable decline among fuels was a fall of about 8% in fuel oil. In Barcelona, sugar surged roughly 79%, butter about 45%, oil around 36%, and the basic basket about 25%. Like Madrid, fuel prices in Barcelona also declined, by roughly 7%.
Mercer’s Careers area manager highlighted that Madrid and Barcelona have kept price levels relatively steady despite broader inflation. They represent a compelling option for expatriate workers, with sustained control of price increases since early in the year.
Mercer’s current snapshot attributes the evolving cost landscape to the Russia-Ukraine conflict and the emergence of more transmissible Covid-19 variants, which have continued to influence growth in many economies. Additional pressures come from aggressive monetary policies and tighter global financial conditions. On the corporate side, telework is prompting many to reassess priorities, work-life balance, and feasible work locations.
Hong Kong again leads Mercer’s ranking as the world’s most expensive city for expatriate staff, followed by Singapore, which moved up several places, surpassing Zurich. European cities appear prominently in the top ten, with five entries, four of which are Swiss and one in Copenhagen. Tel Aviv and Nassau (Bahamas) round out the top ten as well.
In Europe, the costliest cities include London, Vienna, Amsterdam, Prague, and Helsinki, noted in Mercer’s latest comparison with the prior year.
Big ups and downs
African cities show some of the sharpest increases in living costs year over year. Luanda climbed dramatically, rising about 34 places, while Kinshasa advanced 21 to reach the 32nd position. Conakry moved up 37 to hold the 30th spot, and N’Djamena jumped forty places to sit at 40. Across the Latin American region, several capitals rank high in costliness, with San José, Mexico City, Buenos Aires, and Montevideo featured prominently in the upper-mid segment of the list.
More space on the map indicates notable shifts within China as well. Shanghai remains 12th, showing stability, but most other cities in the country dropped positions compared with the prior year. Beijing slipped three ranks; Shenzhen fell seven; Guangzhou dropped 18; Qingdao slid 33; Nanjing fell 47; Shenyang 36; Chengdu 45; Xian 45; Suzhou 43; Chongqing 43; and Wuhan, the original epicenter of the 2020 pandemic, dropped 49 places.