Dublin is rated 56th in a new worldwide cost-of-living survey which also sees it ranked as the fifth most expensive capital in the European Union.
But its index rating of 75.8 points sees it falling six places in the league of the world's most expensive cities compared to 1999 when it was ranked 50th with a figure of 84.2 points.
The latest index - compiled by consultants William M. Mercer - uses New York as the base city scoring 100 points, and draws cost of living comparisons between 146 cities based on a survey conducted in the first week of March 2000.
The comparative costs of more than 200 items were measured in each location. These included the cost of housing, food, clothing and household goods, together with transport and entertainment.
According to a Mercers spokesman, Dublin has moved down the ranks because of the decline in the value of the pound against the dollar on which the survey is based. He also calculated Dublin's inflation rate over the last six months as 2.5 per cent.
Tokyo, with an index of 164.9 and ranked as the most expensive city in the world for the last two years running, is twice as expensive as Dublin and five times that of Quito in Ecuador, the world's least expensive city with an index of 32.1, according to the survey.
In the EU rankings Dublin moves up one place from last year's position as sixth most expensive capital city in the EU. London, the tenth most expensive city in the world, remains the most expensive EU capital, with an index of 106.9, two points less than last year's figures.
In January, Dublin was ranked 40th in the world in the William M. Mercer worldwide quality of living survey. The quality of living survey covered 218 cities and evaluated 39 quality of living factors. New York was again the base city with a score of 100.
Dublin is the only Irish city in the cost of living survey as research is based on requests from multinational companies interested in sending their employees to a certain city. The information is used by governments and major companies to protect the purchasing power of their employees when transferred abroad.
