The costs of living for foreign expatriates in the capital city of Hanoi have been reported to be more expensive than in the southern economic hub Ho Chi Minh City.

In the list of 52 most expensive Asian cities for foreign workers complied by research firm ECA International, the former and the latter are placed in the 39th and 43th position, respectively.

Internationally, the capital city and the southern economic hub are ranked in the 219th and 227th place, up 7 and 8 spots from last year, respectively.

Vietnam’s inflation, represented in consumer price index (CPI), increased by 6.81 percent in 2012 compared with 2011, lower than the 11.75 percent year on year rise in 2010 and an 18.13 percent surge in 2011.

The big picture

According to research firm ECA International, this is the first time in 3 years, Japan’s capital city of Tokyo left its top position as the world's most expensive city for foreigners.

Tokyo has ceded the throne to Oslo (Norway) to slip to the 6th place. The world’s Top 5 included Luanda (Angola), Stavanger (Norway), Juba (South Sudan) and Moscow (Russia).

But regionally, Japanese cities still dominate the top of the cost of living ranking with 4 of the region's top 5 most expensive cities located there.

Seoul joins the race after seeing its regional and global ranking jump from 7th to 3rd and from 29th to 14th, respectively.

“Not only have the prices of goods and services there increased at a faster rate than the previous year, but the Won has also strengthened against major currencies thereby pushing up costs there for many international assignees,” said ECA.

Globally, Beijing (24th), Shanghai (26th), Singapore (36th) and Hong Kong (38th) complete the list of the top 10 most expensive locations in Asia. On average, prices of items in ECA's cost of living basket for Chinese locations have increased little or even seen small decreases this year.

As a result, Chinese locations have fallen slightly down the ranking but the on-going strength of the Yuan against major currencies has prevented them from dropping too far.

Singapore has fallen three places down the list since last year and is currently the 36th most expensive location for expatriates. However, the city is still above Hong Kong, Paris and Manhattan.

Within Asia Singapore ranks 9th– one place above Hong Kong as it was a year ago.

While the Singapore dollar has strengthened against most major currencies in the past twelve months, prices of goods and services in ECA's cost of living basket for Singapore have risen at just 1.6percent over the year - significantly lower than the 6percent increases observed last year.

Hong Kong, ranked 38th in the global list and 10th in the regional list, saw the prices of goods and services in ECA's cost of living basket soar approximately 4 percent over the year on average there.

This is a slightly slower rate of increase than the year before when prices rose 6 percent on average. With the Hong Kong dollar pegged to a stable US dollar, the cost of living for assignees there remained steady.

Indian cities continue to be among the regional cheapest ones in terms of cost of living for international assignees. New Delhi, ranked 200th globally, is followed by Mumbai (215th), Bangalore (231th), Hyderabad (242th), and Kolkata (243th)

Karachi, ranked 256th globally, is the least expensive Asian location for expatriates.