The world's most expensive cities

The annual survey from Mercer compares the cost of living in 214 cities, considering factors like food, clothing and entertainment. Housing is often the largest expense for expats, so that factor plays a big role in the rankings.

Luanda, the capital of Angola, lies on the coast of the country and serves as a port city. After an Angolan civil war ended in 2002, Luanda underwent major reconstruction sparked by the city's diamond and oil production.

New York is still the most expensive city in America, but it dropped 19 places on a worldwide basis to rank 27 overall. Los Angeles is the second most expensive city in America, followed by White Plains and Chicago.

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U.S. cities fell in the worldwide rankings because of a weak dollar and falling house rental costs, the report said.

Africa was the standout continent, with three of its cities cracking the top 10 for the first time: Luanda at No. 1; Ndjamena at No. 3; and Libreville in Gabon at No. 7.

The world's least expensive city is Karachi in Pakistan. Its cost of living is three times cheaper than that of Luanda. 

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