Dubai and Abu Dhabi cost of living increases in global rankings: Report

dubai, UAE

In the Mercer’s Cost Of Living 2023 Survey, Abu Dhabi and Dubai have experienced a rise in their cost-of-living rankings. Dubai is now in the 18th position while Abu Dhabi is at 43rd. However, the UAE’s economy remains strong and resilient, indicating a positive outlook for the future.

The primary factor for the rankings shift is a surge in rental costs, with Dubai experiencing a massive 25% increase, making it the second city after Singapore to be highly affected by rental costs. In contrast, Abu Dhabi’s housing movement has been lower, with changes ranging between 6-8% or remaining stagnant compared to last year.

Both cities have also seen an increase in the cost of living across other categories, such as supermarkets’ food (up to 11%), transportation (4%), and sports and leisure (5%). Vladimir Vrzhovski, Financial Services and Technology Industries Lead at Mercer Middle East, notes that UAE organizations are taking note of these changes and are reviewing their remuneration packages. Some employers are opting to increase bonuses instead of raising base salaries to increase total compensation without any long-term commitment.

Despite the rankings hike, the UAE’s cost of living remains competitive when compared to major global cities. The country has taken proactive measures to manage inflation, exchange rate fluctuations, and housing costs, demonstrating its economic resilience. Hong Kong still retains its position globally.


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