Luxembourg has made a significant leap in the consultancy Mercer’s 2024 cost of living ranking, rising 11 places to secure the 47th position. This annual survey, which evaluates the relative cost of living in 226 cities worldwide, measures the comparative cost of over 200 items in each location, including transportation, food, clothing, household goods and entertainment.

Rankings and influencing factors

Hong Kong its position as the most expensive city globally, followed by Singapore. Swiss cities Zurich, Geneva and Basel completed the top five. The ranking highlighted several factors contributing to the high cost of living in these top cities. In Hong Kong, Singapore and Zurich, the expensive housing markets, high transportation costs and higher prices for goods and services played crucial roles. In contrast, cities like Islamabad, Lagos and Abuja exhibited lower costs of living for international assignees, largely due to currency depreciations.

The survey also noted the impact of inflation and exchange-rate fluctuations on the pay and savings of internationally mobile employees. Additionally, heightened economic and geopolitical volatility, local conflicts and emergencies have increased expenses in areas such as housing, utilities, local taxes and education.

Luxembourg City

Luxembourg City’s rise in the rankings reflects the broader trends observed in the survey. The increased cost of living in Luxembourg can be attributed to various factors, including inflation, exchange-rate fluctuations and economic conditions that affect the cost of goods and services. The city’s improved position also indicates an increase in the cost of living for international expats, driven by local economic factors and market conditions.

According to data provider Mercer, the cost of living ranking is a crucial tool for multinational companies and governments to determine compensation strategies for their internationally mobile employees.