Web Desk
Dubai and Abu Dhabi have climbed up the rankings for the cost of living, according to Mercer’s Cost of Living 2023 survey. Dubai now stands at 18th place, while Abu Dhabi holds the 43rd position. The United Arab Emirates (UAE) continues to exhibit robust economic growth and resilience, boding well for its future.
The rise in rental costs has played a significant role in influencing these rankings. Following Singapore, Dubai has witnessed substantial increases in rent, averaging at 25%. On the other hand, Abu Dhabi has experienced relatively smaller movements in housing prices, ranging from 6% to 8%, or remaining stable in certain areas.
The survey also highlights increases in the cost of living across various categories in both cities, including food in supermarkets (up to 11%), transportation (4%), and sports and leisure (5%).
Employers in the UAE are responding to these changes by adjusting their compensation policies. Many organizations are opting to increase bonuses instead of base salaries to enhance overall compensation without long-term commitments.
Around 40% of surveyed organizations have reviewed their policies for 2023, resulting in an average increase of 5% to 10% in housing allowances based on career level.
Despite the rise in rankings, 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 proactive measures to manage these issues, showcasing its economic resilience.
Globally, Hong Kong retains its position as the most expensive city for expatriates, followed by Singapore in second place. London and Amsterdam have dropped in the rankings, while New York has moved up by one spot.
In the Middle East region, Tel Aviv (Israel) is ranked as the costliest city for international employees, securing the 8th position. Cairo (Egypt) stands at 217th, and Amman (Jordan) at 110th.
The survey states that factors influencing the global economy in 2022 will continue to impact 2023. Inflation and exchange rate fluctuations directly affect the income and savings of expatriate employees.
The cost-of-living crisis is considered one of the most severe global risks, as highlighted in the 2023 Global Risks Report from the World Economic Forum and Marsh McLennan. Addressing inflation requires collaboration between private businesses and the public sector.
