ECA's September 2017 Cost of Living Survey has seen a great divergence in the fortunes of the world's major currencies. The euro and many other European currencies have strengthened while the US dollar and yen have been particularly weak. Despite its weakness after the Brexit vote, the UK pound has been in the middle, regaining some lost ground against the US dollar but still losing out to its neighbours in Europe. These changes will mean assignees around the world will see their cost of living indices impacted in different ways depending on where they have moved from.
ECA has prepared this interactive map to help you understand how key events around the world have affected cost of living indices during our survey period. This should act as a useful guide when considering whether to amend assignee cost of living allowances to ensure that spending power is maintained.
If you require any assistance, or would like additional information or data on the 470 locations included in our survey, or need advice regarding currency fluctuations, please get in touch with your ECA representative.
Since the September survey exchange rates were set, the Ethiopian birr has devalued and has lost around 15% of its value against major currencies. The Turkish lira, South African rand and Zambian kwacha have also been particularly weak since the survey losing around 10% of their value against the euro, pound and US dollar. In each case this will lower future indices for most assignees in the country and make it more expensive to send people from these countries abroad, unless the exchange rates reverse.
Since the survey, the US government has eased economic sanctions against Sudan. This is opening up the economy and increasing demand for already scarce hard currency which is putting pressure on the fixed official exchange rate and has raised the black-market rate to around USD 1 / SDG 23, compared to the official rate, which is still only USD 1 / SDG 6.68. The Sudanese central bank has announced it is taking measures to unify the official and parallel exchange rates by the end of 2019 so expect big changes in the coming years.
ECA's interim surveys
We are currently undertaking interim surveys for the following countries due to high inflation expectations: Argentina, Democratic Republic of the Congo, Egypt, South Sudan, Sudan, Uzbekistan and Venezuela. The results will be available in January 2018.
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ECA publishes cost of living data for 470 cities around the world. It is available from ECA in several forms: as part of a subscription in a calculator which allows you to experiment with different types of index and review the outputs; in reports, providing background detail for specific indices; and as part of the Build-up Calculator for performing balance-sheet calculations. Cost of living data is also pre-populated in ECAEnterprise, our Assignment Management System, and in our Net-to-Net Calculator.