Muscat – Muscat is the least expensive city along with Kuwait City in the Middle East, according to Mercer’s latest Cost of Living City Ranking for international employees.

Ranked 130th, Muscat is the only city in the region to drop in the ranking, that too by 11 places, while all other cities gained in ranks, except for Kuwait City which didn’t see any change in its ranking.

This year’s ranking by Mercer, an American consulting firm, includes 227 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

Tel Aviv remains the costliest city in the Middle East for international employees, ranked 8th on the global ranking. 

The next two most expensive cities of the region are Dubai (18) and Abu Dhabi (43), both of which have seen fairly significant jumps in their rankings since last year, meaning their residents have to adapt to the increasing cost of living. 

The other most costly cities of the region are Riyadh (85th, up by 18 places), Manama (98th, up by 19 places), Jeddah (101), Amman (101), Doha (126th), and Kuwait City (131).

One of the key drivers behind the changes in 2023 rankings is the surge in rental costs. Notably, after Singapore (2nd), which has seen an average 50% hike in rents, Dubai is the second city in the survey where the rental cost has had a significant impact on the ranking. Rents in Dubai have increased by 25% on an average.

Hong Kong once again topped the Cost of Living City Ranking. It is followed by Singapore, which jumped six positions up from the last year’s, pushing Zurich to spot number three. 

The least expensive locations in the ranking include Havana, which dropped 83 spots, due in part to strong currency devaluations mid last-year; and two cities in Pakistan – Karachi (226) and Islamabad (227).

This year, only two out of 10 of the most expensive cities for international assignees to live in are located in Asia, compared to four last year. However, these cities – Hong Kong and Singapore – topped the list. 

The global top ten include five European cities – four of them in Switzerland, and the fifth one  (Copenhagen) in Denmark. Other most expensive cities in Europe include London, Vienna, Amsterdam, Prague (up 27 spots in the global ranking since last year) and Helsinki.

Explaining the emerging challenges and opportunities, Vladimir Vrzhovski, Financial Services and Technology Industries Lead at Mercer Middle East, said, “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.”