In 2017, the Portuguese capital was in 137th place in the same study, and this change is "the biggest increase ever since the beginning of the study," Mercer said in a statement.
The factors that motivate this rise are mainly due to variations of the euro against the dollar, but also reflect a generalised increase in prices of the city in the areas of housing, catering and fuels, the report noted.
This is the 24th cost of living study carried out by the company and was prepared in March.
From 2016 to 2017, Lisbon had fallen three places in this world ranking, although in the previous year it had risen.
This year, the study found Hong Kong to be the most expensive city in the world, knocking Luanda, which ranked first in the list in 2017, off the stop spot. The Angolan capital is now in 6th place.
The survey compares the rent of a three-bedroom apartment in the affluent areas of Lisbon, which is around €2,650 per month, while in Hong Kong, and under the same conditions, the price is €10,800 per month.
The analysis published on Tuesday also points out that the rental of a two-bedroom aprtment in Lisbon costs around €2,000, while in Paris the value is over €2,600 per month, and in London its is €3,500 euros, for example.
According to the study, along with Hong Kong, the top five most expensive cities in the world are Tokyo, Zurich, Singapore and Seoul.
In Lisbon, the price of petrol is one of the highest compared to the cities at the top of this ranking, Mercer said.The analysis said that a litre of 95 octane unleaded petrol costs €1.5 in Lisbon, while in Hong Kong it costs €1.63, in Tokyo €1.01, and Zurich €1.34.
Zurich "remains the most expensive European city, ranking third." The Swiss city rose by one place compared to last year.
According to the study, "Africa, Asia and Europe dominate the list of the most expensive locations for expatriates."
This survey "was developed to help multinational companies and governments define strategies for their expatriate employees," and includes more than 375 cities around the world.
Lisbon is the only Portuguese city covered.
"This year's ranking includes 209 cities on five continents and determines the comparative cost of more than 200 items in each location, including lodging, transportation, food, clothing, household goods and entertainment," the statement said.