Thailand's capital fell from 66 to 88 on the 2014 survey of 211 cities worldwide, which measures the comparative cost of more than 200 items, including housing, transportation, food, clothing, household goods, and entertainment. Rankings are based on fluctuations of currencies against the US dollar and the impact of inflation on goods and services using New York as a baseline.
Luanda, Angola remained the world's most-expensive city for expats and three Asian cities - Hong Kong, Singapore, and Shanghai - ranked in the top 10. Mercer said Beijing (11), Seoul (12), Osaka (23), Guangzhou (24), Nagoya, Japan (40), Nanjing (47), Tianjin (50), Shenyang (54), Taipei (61), Yangon (66), and Chengdu (71) all are more expensive than Bangkok this year.
"Japanese cities have dropped in the ranking this year as a result of the yen's weakening against the US dollar," said Nathalie Constantin-Métral, the Mercer principal who compiled the survey. "However, Chinese cities jumped in the ranking, including Shanghai, Beijing, and Shenzhen, due to the strengthening of the Chinese yuan."
Bangkok dropped 22 places on this year's survey, due largely to the baht's depreciation against the dollar and political instability that has made expat-quality accommodations easier to procure.
"Rankings in many regions were affected by recent world events, including economic and political upheavals, which resulted in currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices," said Ed Hannibal, Partner and Global Leader for Mercer's Mobility practice.
Two African cities, Luanda and N'Djamena, Chad, topped the Mercer list, even though they are relatively inexpensive cities, Mr Hannibal said. The reason is that both "are quite costly for expatriates since imported goods come at a premium. In addition, finding secure living accommodations that meet the standards of expatriates can be challenging and quite costly as well."
Rounding out the top 10 were Zurich, Geneva, Bern and Moscow. Karachi, Pakistan was named the least-expensive expat city while Phnom Penh (169) was Asia's least-expensive city.
Examples of costs driving the survey were rent of a two-bedroom unfurnished apartment. In Birmingham, England - which ranked just one place below Bangkok - a flat cost $1,406 a month while the same apartment in Hong Kong cost $6.960.
A movie ticket in Birmingham was $15.72 vs. $11.60 in Hong Kong, and cup of coffee was $3.72 vs. $6.64 in Hong Kong.