Dubai is currently ranked 18th, while Abu Dhabi is in 43rd position in the Mercer Cost of living ranking for 2023
Mercer's Cost of Living 2023 study showed that Dubai and Abu Dhabi have risen in the cost of living ranking.
Dubai no is ranked 18th, while Abu Dhabi is in 43rd position. Despite these changes, the UAE economy continues to demonstrate strong growth and sustainability, which indicates promising prospects for the future.
One of the key factors contributing to the changes in the rating is the sharp rise in rental prices in Costa Rica.
After Singapore, Dubai is the second city where rental costs have had a significant impact on the dance floor: the average rent has increased by 25 percent.
In contrast, Abu Dhabi has seen a decline in housing construction, with changes in some areas ranging from 6-8 percent or remaining the same as last year.
The survey also revealed an increase in the cost of living in other categories in both cities, including food in supermarkets (up to 11 percent), transport (4 percent), sports and leisure (5 percent).
Vladimir Vrzhovsky, head of financial services and technology at Mercer Middle East, said that employers in the UAE are taking note of these changes, adding that organizations have provided an average annual wage increase of 4.2 percent in 2023.
“Many of them are reviewing their remuneration packages, with an increasing number increasing bonuses instead of increasing basic wages in order to increase overall compensation without long-term obligations. Our research shows that as a response, 40 percent of the surveyed organizations have revised their policy for 2023, increasing their housing benefits by an average of 5-10 percent, depending on the career level,” he said.
However, despite the increase in the rating, the cost of living in the UAE remains competitive compared to major global cities.
Factors such as inflation, exchange rate fluctuations and housing costs contribute to these changes. The UAE has taken active measures to address these problems, which reflects its high economic sustainability.
Globally, Hong Kong retains its position as the most expensive city for expatriates, followed by Singapore, which rose to second place from 8th.
London and Amsterdam dropped several positions in the ranking, while New York rose one line.
In the Middle East region, Tel Aviv remains the most expensive city for international employees, ranking 8th, while Cairo is in 217th place and Amman is in 110th.
Vladimir Vrzhovsky also noted that despite the advantages of a growing economy, the study emphasizes that the factors shaping the global economy in 2022 will continue to have an impact in 2023.
“Despite the advantages of a growing economy, the study shows that the key factors that shaped the global economy in 2022 will continue to have an impact in 2023, while inflation and exchange rate fluctuations directly affect the wages and savings of international mobile employees. From the World Economic Forum (WEF) and Marsh McLennan's report on global risks for 2023, we can also see that the cost-of-living crisis is one of the most serious risks perceived by national governments and businesses around the world. The incentive to reduce inflation is one that private business and the public sector should share,” he said.
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