| Kippreport.com

Believe it or not, survey says Dubai got cheaper

July 24, 2008 9:05 by Louis

Rent increasing by 22 per cent, double digit inflation, Salik, food prices heading north - Dubai’s cost of living may be on the up and up, but it is small potatoes in global terms. According to an annual survey from Mercer on the world’s most expensive cities, Dubai became comparatively cheaper through 2007.

Mercer’s survey measured the comparative costs of more than 200 items ranging from housing to entertainment, using New York as its base city on 100 points. Neither Dubai (89.3) nor Abu Dhabi (85.7) make the top 50 most expensive cities, thanks largely to the dirham being pegged against the depreciating dollar.

If you really want to feel the pain, head to Moscow. The Russian capital tops the list of the world’s most expensive locations for the third year running, London drops from second to third, swapping with Tokyo.

The survey found that one cup of coffee including service would cost on average $4.40 in London, compared with $10.40 in Moscow and $5.10 in Tokyo.

The UAE, with a booming economy, compares favorably with other growth countries. Cities in India all rose in the cost of living ranking, with New Delhi climbing to 55th place from 68th a year ago, as India posted a real GDP growth rate of 9.2% in 2007. Sao Paulo in Brazil and Istanbul in Turkey were among the biggest climbers in the global rankings.

Although consumers globally were feeling the pinch from rising price inflation, large currency shifts and economic differences meant some countries felt it more than others.

“Our research confirms the global trend in price increases for certain foodstuffs and petrol, though the rise is not consistent in all locations,” said Yvonne Traber, a principal and research manager at Mercer.

Mercer said currency trends accounted for many of this year’s shifts in city rankings, with the rouble, euro, and several other currencies all gaining against the US dollar and making US cities in general seem comparatively cheaper.

Countries with high economic growth rates also saw big rises in relative living costs, with Sao Paulo in Brazil and Istanbul in Turkey among the biggest climbers in the global rankings.

Mercer said the survey, which tracked housing rents as well as the cost of clothing, transport and entertainment, was used to help multinational companies and governments determine compensation allowances for their expatriate employees.

Most expensive cities (Mar 2008)

1 Moscow (1)*

2 Tokyo (3)

3 London (2)

4 Oslo (10)

5 Seoul (3)

6 Hong Kong (5)

7 Copenhagen (6)

8 Geneva (7)

9 Zurich (9)

10 Milan (11)

*Last year’s ranking in brackets