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

The 2023 ranking included 227 cities across five continents. Mercer, a management consulting firm, measured and compared the costs of over 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment, while also factoring in currency movements against the US dollar.

The least expensive cities in the ranking include Havana, which dropped 83 spots, partly due to significant currency devaluations in the middle of last year. The two cities in Pakistan, Karachi at 226 (down three places from last year) and Islamabad at 227, also ranked among the least expensive.

Dushanbe, Tajikistan, and Bishkek, Kyrgyzstan were ranked higher than the Pakistani cities, sitting at 223 and 224 respectively. The economic crisis in Pakistan, coupled with the massive depreciation of the rupee against the US dollar, have contributed to these low rankings.

However, citizens within Pakistan are facing high inflation, which hit a record 38% in May last year, though it has since eased. The low demand and economic growth mean the crisis is far from over.

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On the other end of the spectrum, Geneva, Basel, and New York City came in fourth, fifth, and sixth place, respectively, while Copenhagen and Nassau (Bahamas) rounded out the top 10 most expensive cities.

Dubai moved up 13 spots and now sits in 18th place, likely due to its rapid post-COVID recovery and the influx of high-net-worth individuals looking to invest in the city, which has led to surging real estate prices. Last year, Dubai ranked first globally for the number of home sales above $10 million, selling nearly 80% more such properties than second-placed London.