Cost of Living Evolves in Saudi Arabia in line with Swift Economic Progress, Mercer 2023 Report Shows
- Mercer’s Cost of Living 2023 report sees Riyadh and Jeddah moving up to the 85th and 101st spots globally
- Data indicates that even in the face of inflation, the robust economic foundation of Saudi Arabia holds promising prospects for growth and individual living standards
- World-leading GDP growth of 8.7% GDP, wage rises, and a fast-growing non-oil economy are contributing to Saudi Arabia’s economic resilience
Riyadh, June 15, 2023: The recently released Cost of Living 2023 survey by Mercer provides an in-depth view of worldwide affordability. According to the data, Riyadh and Jeddah have ascended the rankings to the 85th and 101stspots respectively, however, they are still positioned among the more economically favorable cities globally for expatriates. Moreover, Saudi Arabia continues to display robust economic growth and resilience despite inflationary pressure changes, providing a promising outlook for the future.
A key driver behind the changes in Saudi Arabia’s cost of living rankings in 2023 has been an increase in the cost of groceries and personal care items, which rose by 7% and 5% respectively. The data collected from expatriates living in compounds also indicates a modest 4% annual increase in accommodation costs – significantly lower compared to the world’s costliest cities, with Singapore (2nd) registering average rent increases of 50%. Within the region, cities in Saudi Arabia compare well to those in other GCC countries, with Dubai’s rising rental costs making a significant impact on its ranking.
Outside of the comparatively modest rise in housing costs in Saudi Arabia, the survey has also identified a 4% rise in the cost of eating out at restaurants. However, unlike much of the rest of the region, the cost of utilities, transportation, and leisure have remained at around the same level as last year.
Commenting on Saudi Arabia’s rise in the rankings, Najla Najm, Partner and Career Business Leader, Mercer Middle East, said: “In 2022, Saudi Arabia recorded an 8.7% growth in GDP and remains one of the world’s fastest-growing economies, keeping the country on-track to achieving the objectives laid out in Saudi Vision 2030. Sweeping pro-business reforms and a sharp rise in oil prices and production have facilitated strong economic recovery, with the oil sector as one of the main drivers of the country’s economic expansion, contributing at least 4.8% of the Kingdom’s overall growth in 2022. Employers are recognizing these changes. Our research shows that Saudi Arabia has witnessed a strong growth in salary increments on the back of its robust economic development. Across the Kingdom, salaries have grown by an average of 4.2%, with the financial services sector seeing 5%, energy sector 4%, and technology sector 4.3% hikes.”
From a global standpoint, the report shows that Hong Kong (1st) retains its position as the most expensive city for expatriates, followed by Singapore, which climbed up from 8th to 2nd spot. Global hubs like London (17th), Amsterdam (28th) have dropped in the ranking by few spots, New York (6th) climbed up the ranking +1. In the Middle East region, Dubai is ranked at the 18th spot, Abu Dhabi 43rd, Manama 98th and Doha 126th.
Explaining the emerging challenges and opportunities, Najla added: “Despite Saudi Arabia being one of the fastest-growing economies, the survey shows that there are global factors that are out of the control of any single policymaker in any one country. Exchange rate fluctuations, geopolitical concerns and continued inflation will heap pressure on the entire global economy in 2023 and continue to cause cost-of-living concerns for most countries. These realities, laid out in the 2023 Global Risks Report from the World Economic Forum (WEF) and Marsh McLennan, illustrate how the cost-of-living crisis is one of the most severe risks perceived by national governments and businesses around the world. The impetus for inflation mitigation is one that private businesses and the public sector must share.”
