Cost of living in major Middle East cities skyrockets

12 December 2023 2 min. read
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Most major cities in the Middle East are more expensive to live in for international employees, according to a global cost-of-living ranking from consulting firm Mercer.

Ranked 8th in the global ranking, Tel Aviv remains the costliest city in the Middle East for international employees. The next most expensive cities in the Middle East are in the UAE: Dubai was listed 18th and Abu Dhabi 43rd, with both seeing significant rise in the rankings since last year.

Saudi Arabian cities have also become quite a bit more expensive for international employees. Riyadh, ranked 85th and Jeddah, ranked 101 st, both also ranked substantially higher than last year, rising by 18 and 10 positions respectively.

Cost of living in major Middle East cities skyrockets

Both the UAE and Saudi Arabia have shown robust economic growth and mostly defied the inflation that is plaguing markets around the world. The rise in the cost of living in the region is on par with the rapid economic progress being made in these wealthy cities, where living standards have improved drastically in a relatively short time.

“In 2022, Saudi Arabia recorded an 8.7% growth in GDP and remains one of the world’s fastest-growing economies,” said Najla Najm, partner and career business leader at Mercer.

“Sweeping pro-business reforms and a sharp rise in oil prices and production have facilitated strong economic recovery, with the oil sector as one of the main drivers of the country’s economic expansion, contributing at least 4.8% of the kingdom’s overall growth in 2022.”

While the cost of living has clearly increased in the Middle East, for expats living in compounds in Saudi Arabia, inflation-related increases have been minimal, at only 4%, whereas in Singapore (the 2nd most expensive city) it was 50%. Most of the other cities that topped the list as the most expensive worldwide were in Asia, Europe, or the United States.

As far as other GCC countries, Qatar’s capital Doha was ranked 126th, up 7 positions since last year, and Manama, Bahrain was 98th, up 19 spots.

The data collected for the ranking was compiled from expatriates living in cities around the world. It features over 200 cities worldwide and measures the cost of every-day expensive from food and clothing to transportation and housing. The survey is designed to help global companies craft compensation packages for international employees.