Hong Kong remains the most expensive city in the world according to the list, which is used by multinationals as a guide to how much they should pay employees in salaries and expenses.
The Mercer survey includes 226 cities, and compares the cost of more than 200 items in each one, covering transport, food, clothes and entertainment.
The top five in the latest list is completed by Singapore and the three Swiss cities of Zurich, Geneva, and Basel. Another Swiss city, Bern, is in sixth place.
Belfast, the only other Irish city in the survey, is in 87th place, up 38 spots. Several British cities have jumped up the rankings – Birmingham is up 40 places, and Aberdeen is up 37.
Dublin moved up 10 places to 41st spot, putting it ahead of Edinburgh (53), Milan (57), Rome (67) and Madrid (76), but behind London (8), Paris (29) and Amsterdam (30).
“Cost of living is a key consideration for multinational businesses making decisions on site selection and expansion,” said Danny Mansergh, head of career consulting at Mercer. “High demand in the private rental market – often the biggest cost for companies placing employees on assignment – along with such items as utility costs, present challenges for employers of international assignees.”
Mr Mansergh noted that although Dublin is higher in this year’s rankings, the cost of living for expatriates there remained relatively stable. “As inflation pressures have eased, increases in the cost of expatriate rental accommodation, as well as goods and services, were relatively low in Dublin and in line with Western Europe. Dublin remains an attractive location for expatriates when they elect to go on assignment.”
The increased cost of housing in many cities has made talent mobility a challenge for employers, according to Mercer. Volatile inflation trends are also eroding their workers’ purchasing power.
Asia has the top two cities in terms of cost of living, mainly due to high rent. It’s also a significant issue in America, with all its cities being placed in the top 100 and seven are in the top 20.
Ranked in 15th place, Dubai is the costliest city in the Middle East. Within South America, Uruguay’s capital Montevideo ranks as the most expensive location for international employees.