Mercer: Dubai is 18th and Abu Dhabi is 43rd globally in terms of cost of living for expatriates. The economic foundations of the UAE herald progress in growth and quality of life.

The Mercer company issued its annual report on the cost of living for the year 2023, which provides a complete picture of the changes in the cost of living around the world. Strong and great ability to adapt to changes, indicating promising future expectations.

One of the main factors behind the new changes in the 2023 rankings is the sudden rise in housing rental costs, with Dubai coming in right after Singapore (ranked second) which saw a 50% rise in average rent by region. Rental costs significantly affected Dubai’s rating, with rents rising by 25%. On the other hand, the impact of housing movement was less in Abu Dhabi, where the rate of rent increases ranged between 6% to 8%, while rents maintained the same rates as last year in some areas.

Apart from rent, the study showed an increase in the cost of living in other areas in both Dubai and Abu Dhabi, with an increase of up to 11% in food prices in stores, 4% in transportation, and 5% in the areas of sports and entertainment.

Competitive cost of living

Vladimir Verjovsky, Head of Financial and Technical Services at Mercer Middle East, said: “It is clear that employers in the UAE are closely monitoring these changes. Our study found that some companies have increased annual wages by 4.2% on average during the current year. Many are reviewing and re-evaluating bonus packages in order to improve compensation rather than increase base wages to increase total compensation without a long-term commitment to a salary increase, and as a result, 40% of companies surveyed are revising their policies for 2023 by increasing housing allowance by 5% to 10%, on average, according to the job level.

Despite its advancement in the global rankings, the cost of living in the UAE is still competitive compared to many major cities around the world, and the changes that have taken place can be attributed to several factors, including inflation, fluctuations in exchange rates and housing costs, but the UAE is proactive in managing these issues, reflecting the strength and resilience of its economy.

Hong Kong is the most expensive

Globally, Hong Kong maintained its position as the most expensive city for expats, followed by Singapore, which moved up from eighth to second, and some cities such as London slipped to 17th, Amsterdam to 28th, while New York moved up one place to sixth. . In the Middle East, Tel Aviv remains the most expensive city for international staff, at 8th place, Cairo at 217th, and Amman, Jordan, at 110th.
Vladimir concluded: “Despite the many benefits of continuous economic growth, the study shows that the main factors that shaped the global economy in 2022 will continue to influence during 2023. Inflation and exchange rate fluctuations directly affect the salaries and savings of international employees, as we can see from The 2023 Global Risks Report, published by the World Economic Forum in cooperation with Marsh McLennan, states that the cost of living crisis is one of the most severe risks for governments and local companies around the world, and all private and public sector companies must cooperate to mitigate inflation. .»