Tel Aviv remained the most expensive city in the Middle East, although it is the only one in the region to move down in the world ranking, from 14th to 17th.
The cost of living for expats based elsewhere in the GCC also rose with Kuwait City moving from 94th to 77th, Manama from 112th to 82nd, and Riyadh from 119th to 90th.
Jeddah was the least expensive city in the region ranking 109th from 126th.
Tokyo has knocked Moscow off the top spot to become the world’s most expensive city for expatriates, according to the survey.
Osaka came second, up nine places since last year, whereas Moscow was now in third place.
Commenting on the study, Bassam Gazal, who heads the Mercer Survey practice across the Middle East said: "As a direct impact of the economic downturn over the last year, there have been significant fluctuations in most of the world's currencies.
"As currency fluctuations play a large role in the cost of living rankings this, has had a profound impact on this year's ranking.
"In the cases of Dubai and Abu Dhabi, a stronger US dollar meant an increase in rankings for these cities. That being said, in this study the currency fluctuations and inflation rates affect only the expatriate programmes for which the Cost of Living survey is dependent on - accounting for the jump in rankings for the GCC countries included."
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Stoma Jul 18, 2009 08:37 am
Mr. Bassam Gazal demonstrates complete lack of understanding in the principles of basic economics:
"In the cases of Dubai and Abu Dhabi, a stronger US dollar meant an increase in rankings for these cities."
In an import-driven economy, a stronger currency is better, because the cost of imports will be kept down. On the contrary, when the US currency started losing value against the yuan, the yen and the euro - the cost of everything came up. Mercer, you should send Mr. Bassam back to school. I know you're getting fat consultancy cheques from half of the large enterprises in the UAE. At least you could spend some money and hire people that know stuff...
Khalid Hussain Jul 11, 2009 03:38 am
Having lived in the UAE for almost 10 years, the cost of living has risen tremendously over the past 3-4 years. The financial crisis has put downward pressure on the cost of living, without which I am sure Dubai and Abu Dhabi would have been shown as being even more expensive in comparison to other cities.