Dubai and Abu Dhabi have been ranked as the 23rd and 33rd most expensive cities to live in (respectively) according to Mercer’s 2015 Cost of Living Survey. The two cities have experienced a significant jump compared to 2014, with Dubai soaring 44 places from last year’s position at 67 and Abu Dhabi going up 35 places from 68th in 2014. Jeddah at 151 continues to be the least expensive city in the region despite rising 24 places.
Significant increase in the cost of living ranking is seen among almost all major Middle East cities, both Manama (91) and Doha (99) moved up 59 places, Amman (54) moved up 49 places, Riyadh (71) moved up 40 places, Kuwait City (117) moved up 30 places, and Beirut (44), the most expensive Middle Eastern city after Dubai and Abu Dhabi, moved up 19 places.
“Many currencies in the Middle East are pegged to the US dollar, which pushed the cities up in the ranking. Global currency fluctuations were a key factor influencing the significant changes observed in the overall raking in 2015.” said Nuno Gomes, Information Solutions leader for ME at Mercer. “Steep increase for expatriate rental accommodations, particularly in Abu Dhabi and Dubai, has also contributed to the increase of the cities in the ranking,” added Gomes.
Although these increases in the ranking do not have a direct impact on employees currently working and living in the UAE and other countries in the region, the cost for multinationals to move staff to Middle East countries has greatly increased over the last year, potentially reducing the attractiveness of the region for such assignments.
However, in the opposite direction, for regionally based companies looking to send employees overseas on work assignments, these have become potentially much more affordable. “GCC based organizations may take this as an opportunity to increase their international assignment activity and provide greater career experiences to high potential employees.” commented Gomes.
According to Mercer’s 2015 Cost of Living Survey, Asian and European cities – particularly Hong Kong (2), Zurich (3), Singapore (4), and Geneva (5) – top the list of most expensive cities for expatriates. The costliest city for the third consecutive year is Luanda (1), the capital of Angola. Despite being recognized as a relatively inexpensive city, the cost of imported goods and safe living conditions in this country are available at a steep price.
Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai (6), Beijing (7), and Seoul (8) in Asia; Bern (9); and N’Djamena (10). The world’s least expensive cities for expatriates, according to Mercer’s survey, are Bishkek (207), Windhoek (206), and Karachi (205).
India’s most expensive city, Mumbai (74), climbed 66 places in the ranking due to its rapid economic growth, inflation on the goods and services basket, and a stable currency against the US dollar. This most populous city in India is followed by New Delhi (132) and Chennai (157) which rose in the ranking by 25 and 28 spots, respectively. Bangalore (183) and Kolkata (193), the least expensive Indian cities, climbed in the ranking, as well.
Mercer's authoritative survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees. New York is used as the base city, and all cities are compared against it.
The survey includes 207 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.