Oslo has overtaken Tokyo as the world’s most expensive city for expatriate workers, a survey by international human resources organization ECA has found. Stavanger holds the third position. The strength of Norway’s krone against major currencies is still the key factor that increases the cost of living for foreigners in Norway.
Between Oslo and Stavanger, the ranking placed Luanda, the capital of oil-rich Angola, in second position. Juba, the capital of South Sudan is number four, with Moscow in the fifth position. Tokyo dropped to number six, partly because the Japanese yen has depreciated in recent months.
The organization Employment Conditions Abroad (ECA) carries out two Cost of Living Surveys each year, aiming to help companies calculate the allowance necessary to ensure that employees maintain their purchasing power when posted internationally. The survey compares a basket of consumer goods and services commonly purchased by expat workers in more than 400 locations worldwide.
Norway is known for high prices and past ECA surveys also have ranked Oslo as the most expensive capital in Europe, but this is the first time Norway’s capital has the dubious honor of being ranked as the world’s most costly for foreigners. Back in 2009, it was in the seventh position on the list.
“Norway has among the highest standards of living in the world, largely derived from oil revenue,” the survey said. “While prices there have increased little in the last year, the free-floating Norwegian Krone has remained strong, reflecting the country’s relative economic resilience.”
That could change, though. The krone fell sharply on Thursday, weakened by central bank chief Øystein Olsen’s predictions of slower economic growth in Norway’s economy in coming years. His remarks weakened the Norwegian krone substantially against the US dollar, from around 5.70 to more than 6.0 by Friday afternoon.
Analysts said the drop was the sharpest in 15 years, probably reflecting general market nervousness more than a sudden lack of confidence in Norway’s economy. According to chief economist Harald Andreassen of Swedbank First Securities, there is a danger that Norway’s currency will weaken further over the next couple of years. “But not much will happen the next few months,” he told website dn.no. Another economist said the Norwegian krone is as unpredictable as Norway’s summer weather.
ECA’s ranking (external link)
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