• 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: 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 101st spots 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.”

About Mercer’s Cost of Living Survey

Widely recognized Cost of Living ranking is one of the world’s most comprehensive studies and is designed to help multinational companies and governments determine compensation strategies for their international assignees. New York City is used as the base city for all city ranking comparisons and currency movements are measured against the US dollar. The survey includes 400+ cities throughout the world; this year’s ranking 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. The data collected provides all of the key elements employers need to design efficient and transparent compensation packages for international assignees. Learn more here.

About Mercer

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 85,000 colleagues and annual revenue of over $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn.

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Contact:
Ana Baptista    
ana.baptista@mercer.com