Lisbon has risen 17 positions in consultancy Mercer's global ranking of the most expensive cities for expatriate workers, now occupying 100th place in a list that compares the cost of living in 226 cities around the world. At the European level, the Portuguese capital remains in 39th position, as it was in the previous year's edition.

Mercer's 2023 analysis positioned Lisbon as the 117th most expensive city for expatriates, eight positions lower than the previous year when it occupied 109th place, a drop of 26 places compared to the 2021 ranking.

This year, the list, drawn up by comparing the cost of more than 200 items — included in the categories of housing, transport, food, clothing, household products and entertainment — continues to be led by Hong Kong, followed by another Asian city: Singapore.

Zurich, Geneva and Basel, three cities located in Switzerland, complete the 'top 5' of metropolises with the highest cost of living worldwide, followed by another Swiss city in sixth place, Bern. The remaining cities in the ‘top 10’, in descending order, are New York (United States), London (United Kingdom), Nassau (Bahamas) and Los Angeles (United States).

Most expensive

Among the most expensive cities in the European context are also Copenhagen (11th position), Vienna (24th position), Paris (29th position) and Amsterdam (30th position), according to the consultancy's ranking, which is designed to help multinationals and governments determine compensation strategies for their expatriate workers.

On the other hand, the Belarusian capital, Minsk, is the cheapest city on the European continent for expatriates, ranking 212th in Mercer's analysis. Sarajevo (203rd position), Skopje (198th position), Krakow (175th position) and Wrocław (169th position) are other European cities with lower costs.

All North American cities are ranked in the top 100, with seven cities in the top 20, while Uruguay's capital Montevideo (42nd) is the most expensive city for foreign workers in South America. In 58th position, Sydney is the most expensive city in the Pacific region, surpassing Noumea, in New Caledonia (60th position), and Dubai (15th position) is the most expensive city in the Middle East.

On the African continent, the most expensive cities are Bangui (14th position), in the Central African Republic, Djibouti (18th position), capital of the country with the same name, and Djamena (21st position), in Chad. Lagos (225th position), in Nigeria, has dropped 178 places since last year, this being the biggest change compared to the previous year. This change is mainly due to exchange rate fluctuations, including repeated devaluations of the local currency.

Cost of living

“Cost of living challenges have a significant impact on mobility in multinational companies and their employees”, highlights Tiago Borges, career business leader at Mercer Portugal, cited in a statement. The person in charge advocates that organisations be aware “of trends and take employee feedback into account so that they can effectively manage the impact of these issues”.

At the same time, Tiago Borges also notes that the rise in the cost of living leads workers to rethink their routines and reduce expenses, “and may even require them to make additional efforts to be able to satisfy their basic needs”. Faced with these challenges, he admits that companies should reconsider the compensation associated with mobility, pointing out as examples that “include or reinforce housing support, provide support services or explore alternative strategies for attracting and retaining talent”.