London – which has previously been as high as second on the list – is now in 25th place, behind the likes of São Paulo, Beijing and Gabon’s Libreville.
Karachi is ranked as the world’s cheapest city for expatriates, less than one-third as expensive as Tokyo.
The report, carried out by consultancy firm Mercer, covers 214 international cities and measures the cost of over 200 items including transport, food, clothing, household goods and entertainment.
“When compared to New York, our benchmark city, most European cities have witnessed a decline in cost of living,” said Mercer’s Nathalie Constantin-Métral.
“Exceptions exist where accommodation prices have increased or additional VAT taxes have pushed the cost of living up.”
In North America, most cities have gone up in the ranking, as the US dollar has strengthened against a large proportion of the world’s other currencies.
TOP 10 MOST EXPENSIVE