Survey shows Gulf states rising costs of living

Published:  23 Jun at 6 PM
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In spite of readjustments in their local economies, Abu Dhabi and Dubai’s survey rankings have moved up, indicating more expense for expats in the region.

The Mercers cost of living survey found that Dubai had risen one point to 20th most expensive world city, with Abu Dhabi following on at 23rd, two points up from last year’s study. Several other Gulf cities including Doha, Muscat and Riyadh also featured in the list of top 100 most expensive expat destinations. The Dubai and Abu Dhabi ratings come as something of a surprise as their job markets are at present unstable and a number of the largest employers are cutting back on expat staff as well as on overheads.

Last year’s downward pressure on rents was expected to lower the cost of living, with the survey putting the rises down to other factors. Another supposedly positive factor in the UAE and other Gulf states should have been currency fluctuation, but a senior Mercers official told the media the current survey found it was less important than had been expected. The rankings, he added, are a true reflection of the increased cost of living in the region, compared to other global cities.

Also mentioned on the positive side was a lack of significant reductions in offered expat packages, although it seems many companies are making smaller adjustments in order to contain escalating costs in general. Limitations on benefits such as private health insurance, the capping of business expenses, some travel restrictions and less generous annual salary increases would seem to be the way forward.

Apart from Luanda topping the poll as the planet’s most expensive city, Asian cities dominated the top ten in the listings, with Hong Kong in second place, Tokyo in third, Singapore at fifth, Seoul scoring sixth and Shanghai in at eighth. According to Mercers, expensive expatriate consumer goods, a dynamic real estate market and a stronger yen pushed Tokyo higher, with most Chinese cities falling due to a weak yuan against the US dollar.
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