(MENAFN - Khaleej Times) Abu Dhabi and Dubai are the two most expensive cities in the GCC, according to the 2018 Worldwide Cost of Living report by the Economist Intelligence Unit.
Ranked globally at 62nd, Abu Dhabi has a Worldwide Cost of Living (WCOL) Index rating of 73 compared to the global benchmark of 100 rating for New York. Dubai, ranked 66th globally, has a WCOL of 72.
Bahrain is the third most expensive city in the GCC with a global ranking of 93rd and a cost of living index of 63, followed by Kuwait and Doha, both ranked 101st globally.
Al Khobar, Muscat, Jeddah and Riyadh are all ranked 107 globally with WCOl of 57, EIU report said.
The 2018 Cost of Living Index, produced by global database Numbeo recently, has ranked Dubai as the most expensive city to live in across the Arab world, and 210th globally out of 540 cities. Numbeo's Rent Index ranked Dubai in first place among Arab cities and third place in Asia, after Hong Kong and Singapore.
Roxana Slavcheva, editor of the survey, said: "The relative cost of living has declined over the past 12 months across the Gulf states in all cities, except Abu Dhabi where it has stayed stable. There's a common theme emerging here: all of these eight cities which have moved down the ranking in the past 12 months peg their currencies to the dollar. Thus, a weakening of the US dollar in 2017, has not only affected the position of US cities but other cities globally."
"In Saudi Arabia for example, the drop in the ranking for Riyadh [52nd], Al Khobar and Jeddah [joint 57th] also reflects persisting deflation as the economy struggled to cope with slowing growth, low oil prices, and increased pressure due to removal of subsidies and excise duties. The UAE will be the one to watch next year, however, after the introduction of VAT this year. We expect Dubai and Abu Dhabi to rise in cost of living terms as a result over the next survey cycle," she added.
Jason Panicker, a consultant with an accounting firm, said: "Both Dubai and Abu Dhabi have become the preferred destinations of the world's richest thanks to world class living conditions and most modern infrastructure facilities. However, cost of living in these cities have been steadily going up, driven by high rents and rise in fees for a wide range of services."
Across the world, Singapore retains its title as the world's most expensive city for the fifth consecutive year in a top ten that is largely split between Asia and Europe. Seoul is the only other city in the top ten that has maintained its ranking from the previous year.
In the rest of Asia, Hong Kong and Sydney join Singapore and Seoul in the top 10.
This year's survey - which compares more than 400 individual prices across over 150 products and services - also finds that half of the ten most expensive cities in the world are based in Europe, with Paris, Zurich and Oslo among the ten priciest.
According to other key findings, Asian cities remain among both the most expensive and the cheapest cities in this year's survey.
Mexico City saw the fastest rise in the relative cost of living of any other city, moving up 23 places to 59th position.
Asia Pacific and European destinations dominated the ranks of costliest cities identified in the report released this week. Tokyo and Osaka were conspicuous in their absence from the top 10, edged out by low inflation.
As recent as 2013, Tokyo was the world's costliest city to live in. The Japanese capital dropped seven places to 11th over the past year. Hong Kong, last year's second-most expensive city, slipped to fourth place.
Sydney rose four notches to break into the top 10, with Oslo, Geneva, Zurich and Copenhagen also climbing the list compiled from a survey of 160 items across 133 countries.
"Currency fluctuations continue to be a major cause for changes in the ranking," the EIU said.
A weakening dollar meant no American city was among the 10 most expensive despite a rise in the relative cost of living in the US over recent years, the EIU said. The report named New York and Los Angeles as the 13th and 14th costliest, down from ninth and 11th position last year.
Paris is the only eurozone city among the top 10 most expensive even as the euro rallied. The EIU said the French capital remained "structurally extremely expensive to live in, with only alcohol, transport and tobacco offering value for money compared with other European cities."
Car ownership was a factor behind Singapore's top ranking. However, the report noted that the city-state remains significantly cheaper than its peers in terms of household goods and hiring domestic help.
The report said although Asia is home to the world's most expensive places to live, it also has some of the most affordable. South Asian cities including Bangalore, Chennai, Karachi and New Delhi provided good value for money, the report noted. This year, Damascus and Venezuela's Caracas were ranked the world's cheapest.
Issac John Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.
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