The Iranian capital is less expensive than 124 other cities surveyed with a rating of 32 compared with 137 of Tokyo, ranked as the world's most expensive city.

The Worldwide Cost of Living index compares prices and products with the aim of providing companies with an independent guide to calculate allowances for executives and their families being sent overseas.

The list shows a relative increase in the cost of living in Europe due to the strengthening value of the euro, with Copenhagen and Paris, ranked respectively at 6th and 7th in the world, overtaking London, in 10th place, as the most expensive EU capitals.

Oslo, outside the EU, remains the most expensive European city, but rises to third place in the global ratings behind the Japanese city of Osaka Kope.

New York, with the base index of 100, falls below London for the first time from seventh to 13th place. Other European cities more expensive than New York are Zurich, Geneva, Vienna and Helsinki.

Among Arab cities in the Middle East, Amman remains the most expensive capital, but falls from 32nd to 54th place in the world list. Other sharp falls are recorded by Dubai, down 47th to 76th, Abu Dhabi, from 55th to 74th and Riyadh down from 63rd to 72nd.

Just above Tehran among the least expensive cities are Asuncion, Harare, Manila, Sao Paulo, Mumbai, Rio de Janeiro, New Delhi and Karachi.