Dhaka has become the world's 40th most expensive city for international employees to live in and is costlier than Washington, according to this year's Mercer Cost of Living Survey.
It was the 26th most expensive city in the world last year.
Despite dropping 14 places in a year, the city is still costlier for overseas workers to live in than some of the most developed ones in the world. Toronto ranked 98th on the list, Madrid 67th, Luxembourg 63rd, Washington 51st, Bangkok 46th, and Dubai 42nd.
Moreover, the Bangladesh capital was again named the most expensive city in South Asia on the list, followed by Mumbai (78th), New Delhi (117th), Islamabad (199th), and Karachi (201st).
Golam Rahman, president of Consumers' Association of Bangladesh, said land prices and construction costs are very high in Dhaka, which pushes up rent a lot.
This makes the city expensive for international employees to live in, he said.
He said most of what foreigners consume are imported from Europe and duty or tax on those goods are high in Bangladesh, which also makes living here expensive.
"Car import duties are high, which makes private transportations expensive. Terrible traffic jams and high levels of air pollution also add to costs."
He said Dhaka being expensive for expats negatively impacts foreign investment.
Dhaka is not a durable city at all, said Rahman.
"There is a saying that foreigners cry before coming to Dhaka. But when they leave, they also cry because they have already fallen in love with our culture," he laughed.
He added, "If we want to attract international employees here, we need to focus on their cost of living so that it would be affordable for them."
Released on Tuesday, Mercer's annual report titled "2021 Cost of Living City Ranking" ranked 209 cities based on the comparative cost of expenses of more than 200 goods and services, including housing, transportation, food, home services, clothing, and entertainment. The New York City was the baseline for the comparison.
The cost comparisons were derived from the survey conducted in March this year.
The report found Turkmenistan's capital Ashgabat is the most expensive city for international employees, pushing Hong Kong to second place.
Beirut ranked third, climbing 42 positions up the ranking as a result of a severe and extensive economic depression due to the escalation of several crises, including the country's largest financial crisis, Covid-19, and the 2020 Port of Beirut explosion.
More than half of the top 10 most expensive cities are located in Asia – Ashgabat (1st), Hong Kong (2nd), Tokyo (4th), Shanghai (6th), Singapore (7th), and Beijing (9th).
On the other hand, the world's least expensive cities for international employees are Tbilisi (207th), Lusaka (208th), and Bishkek (209th).
"The cost of living has always been a factor for international mobility planning, but the pandemic has added a whole new layer of complexity, as well as long-term implications related to health and safety of employees, remote working and flexibility policies, among other considerations," said Career President and Head of Mercer Strategy Ilya Bonic.
"As organisations rethink their talent and mobility strategies, accurate and transparent data is essential to compensate employees fairly for all types of assignments," he added.