Moscow is the world's most expensive city for the third straight year
© AFP/File Alexander Nemenov

LONDON (AFP) - The study takes New York as the base measure for prices, comparing over 200 items, including housing, transport, food, clothing, household goods and entertainment, in 143 cities across the globe.

Europe and Asia dominate the top 10 in the study by British-based consultancy firm Mercer, while the Paraguayan capital Asuncion is the least expensive for the sixth straight year.

The weakening dollar has a key impact on costs for expatriate staff, making American cities comparatively cheap for non-Americans while US executives sent abroad by their firms face huge bills in dollar terms.

"Moscow's position as the most expensive place for expatriate living has been strengthened by the appreciation of the ruble against the US dollar and ... rising accommodation costs," said Mercer research head Yvonne Traber.

"Although the traditionally expensive cities of western Europe and Asia still feature in the top 20, cities in eastern Europe, Brazil and India are creeping up the list," she added.

The Russian capital is the world's most expensive city for the third straight year, with a cup of coffee in a Moscow cafe priced at 10.40 dollars (6.60 euros) including service.

Other Asian cities in the top 10 include Seoul in fifth and Hong Kong in 6th. Osaka is just outside the top 10 at number 11.

North America is the place to go for cheap living: New York is its only city to feature in this year's top 50 in 22nd place, dropping seven places on its 2007 ranking.

"On the bright side, the US dollar's loss of value may serve to attract globally mobile executives to business centres such as New York, Chicago and Los Angeles," said Traber.

"The difference in cost of living can be significant, particularly for those executives with families," she added.

In the Middle East, Tel Aviv remains the most expensive city in 14th place, while Dubai and Abu Dhabi have dropped to 52 and 65 respectively, mainly due to their currency being pegged to the US dollar.

African cities have mostly moved down the league table, except for Lagos which has moved up to 30th place.

Here are the top 20 most expensive cities, with their 2007 places in brackets:

1 (1) Moscow

2 (4) Tokyo

3 (2) London

4 (10) Oslo

5 (3) Seoul

6 (5) Hong Kong

7 (6) Copenhagen

8 (7) Geneva

9 (9) Zurich

10 (11) Milan

11 (8) Osaka

12 (13) Paris

13 (14) Singapore

14 (17) Tel Aviv

15 (21) Sydney

16 (16) Dublin

16 (18) Rome

18 (12) St. Petersburg

19 (19) Vienna

20 (20) Beijing

©AFP