Abu Dhabi, Dubai, Muscat slide down cost of living table

Abu Dhabi, Dubai and a host of other Gulf cities have become less expensive over the last year in comparison to their global peers, according to a cost of living ranking by HR consultancy Mercer.

The company ranked Abu Dhabi in 40th from 22nd last year and Dubai in 26th from 19th after both cities climbed the table in 2017.

Jeddah maintained its position in 117th, Doha declined from 81st to 115th and Muscat declined from 92nd to 117th.

In contrast, the Saudi capital Riyadh was one of the few Gulf cities to climb the ranking from 52nd in 2017 to 48th in 2018.

“On the whole, most Middle Eastern cities have dropped in the ranking, due to decreases in rental accommodation costs throughout the region,” said Yvonne Traber, global mobility product solutions leader at Mercer.

Other factors impacting the cost of living in regional cities in comparison to their global peers included the declining value of the US dollar against some currencies, as most GCC countries have a dollar peg.

Mercer said globally factors including instability of housing markets, low inflation and fluctuating prices for goods and services were impacting the cost of living and doing business in some cities.

Four of the world’s five most expensive cities were in Asia, with Hong Kong leading the 2018 list followed by Tokyo, Zurich, Singapore, Seoul, Luanda, Shanghai, Ndjamena, Beijing and Bern.

At the bottom of the list in 209th stood Tashkent, followed by Tunis, Bishkek, Banjul, Karachi, Blantyre, Tbilisi, Minsk, Tegucigalpa and Managua.

The results were based on a survey conducted in March 2018. Exchange rates from that time and a basket of international goods and services were used as base measurements.

Mercer’s findings came despite rising inflation in the UAE at the start of the year linked to the introduction of a 5 per cent value added tax.

Consumer price inflation hit a multi-year high in January before easing in March, with slumping property markets in Dubai and Abu Dhabi among the factors keeping costs down.

Read: UAE inflation continues easing in March after tax boost

The tax was also introduced in Saudi at the same time, along with higher fuel and electricity prices, which may have been a key reason for Riyadh’s advance up the table.

Read: Saudi Arabia raises fuel prices

Other research factoring in basic monthly expenses like food and clothing and ‘extras’ including accommodation, international school tuition, language lessons and household help for a family with children from Swiss bank UBS had suggested Dubai was among the most expensive cities in the world for expats.

Read: Dubai among world’s most expensive cities for expats