Dubai now holds the 18th spot, while Abu Dhabi is at the 43rd position on the Mercer’s Cost of Living 2023 survey.
The Mercer’s Cost of Living 2023 survey has revealed that Dubai and Abu Dhabi have moved up in the rankings in terms of cost-of-living.
Dubai now holds the 18th spot, while Abu Dhabi is at the 43rd position. Despite these changes, the UAE’s economy continues to show robust growth and resilience, indicating a promising outlook for the future.
One of the key factors contributing to the changes in the rankings is the surge in rental costs.
After Singapore, Dubai is the second city where rental costs have had a significant impact on the ranking, with average rent increases of 25 percent.
The survey also identifies increases in the cost of living in other categories in both cities, including food in supermarkets (up to 11 percent), transportation (4 percent), and sports and leisure (5 percent).
Vladimir Vrzhovski, Financial Services and Technology Industries Lead at Mercer Middle East, said that employers in the UAE are taking note of these changes adding that organisations have provided an average annual merit increase of 4.2 percent in 2023.
“Many of them are reviewing their remuneration packages, with a growing number increasing bonuses instead of increasing base salaries to increase the total compensation without long term commitment. Our research shows that as a response, 40 percent of the surveyed organizations have reviewed their 2023 policies by increasing their housing allowances on average by 5-10 percent based on the career level,” he said.
However, despite climbing in the rankings, the UAE’s cost of living 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, reflecting its strong economic resilience.
On a global scale, Hong Kong retains its position as the most expensive city for expatriates, followed by Singapore, which has climbed to the second spot from 8th.
London and Amsterdam have dropped a few spots in the rankings, while New York has climbed one spot.
In the Middle East region, Tel Aviv remains the costliest city for international employees, ranked 8th, while Cairo is at 217th and Amman at 110th.
Vladimir Vrzhovski also mentioned that despite the benefits of a growing economy, the survey highlights that factors shaping the world’s economy in 2022 will continue to have an impact in 2023.
“Despite the benefits of a growing economy, the survey shows that key factors that have shaped the world’s economy in 2022 will continue to exert an influence into 2023, with inflation and exchange-rate fluctuations directly impacting the pay and savings of internationally mobile employees. We can also see from the 2023 Global Risks Report from the World Economic Forum (WEF) and Marsh McLennan that the cost-of-living crisis is one of the most severe risks perceived by national governments and businesses around the world. The impetus for inflation mitigation is one that private businesses and the public sector must share,” he said.
This article is originally published on: www.arabianbusiness.com