South Africa is the cheapest country in the world for foreigners who are looking to retire or relocate, according to the latest data from Numbeo and GoBankingRates.
The ranking takes the data from four different indices, including a local purchasing power index, a rent index, a groceries index, and the consumer price index to determine the countries which offer expats the most affordable cost of living.
The indices are relative to the dollar, and the cost of living in New York City.
South Africa emerged as the most affordable country in the world out of 112 countries. This is due in large part to the poor performance of the rand, and the relatively low cost of living when compared to NYC.
On a purchasing power basis, the rand has about double the purchasing power than the dollar in NYC (meaning the same basket of goods is half the cost in South Africa than in New York).
Along with a higher local purchasing power, South Africa also offers lower prices on consumer goods and groceries, and rent costs that are typical of the 50 cheapest countries, the group said.
In Cape Town, for instance, monthly expenses total just under $400 while the average rent costs are reflected by the typical price to rent a one-bedroom in Durban of around $280 a month.
This is what GoBankingRates found about South Africa:
- Local purchasing power is 26.9% higher
- Rent is 87.5% cheaper
- Groceries are 71% cheaper
- Local goods and services are 65.8% cheaper
Notably, the cost of living ranking is only applicable to those who are basing their decisions in dollar terms, and is not a reflection of the cost of living for South Africans earning locally in rands.
For South Africans, the cost of living in 2016 has only become more expensive, with food prices in particular increasing over 40%, according to available data. Low income households have been hit particularly hard.
South Africa is seen as a desirable destination due to the favourable exchange rate, while the country also boasts many ‘first world’ luxuries and amenities. The country has a mature financial market and some of the most developed infrastructure on the continent.
On the other end of the spectrum, Bermuda was found to be the most expensive country in the world, ahead of the Bahamas, Hong Kong and Switzerland.
These are the 20 cheapest countries in the world for expats
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These are the 20 most expensive countries in the world for expats
Source: business Tech