The Middle East has experienced a drop in inflation in most cities over the past two years following a few years of relatively high inflation. The strong link of most regional currencies to the United States Dollar has resulted in many regional currencies strengthening against other major currencies. The United States Dollar has strengthened against the Euro by around 21% in the past two years making imports from Europe into the region cheaper.
Doha (ranked 69 in the world), with one of the highest economic growth rates in the world, is the most expensive city in the Middle East, as at 1 July 2010, followed by Abu Dhabi (ranked 73 in the world). The largest change in cost of living has been in Dubai (ranked 131 in the world) with a cost of living index of 82.15 (New York = 100), currently the sixth most expensive city surveyed in the Middle East, having previously been ranked amongst the most expensive cities in the region. Household accommodation, which comprises 30% of the 13 basket groups based on expatriate expenditure norms, has fallen dramatically in Dubai in the past year, as a result of over-supply, given the impact of the financial crises. The cheapest city surveyed in the Middle East (and cheapest in the world) is Sanaa in Yemen (ranked 282 in the world) with a cost of living index of 51.76, almost half that of New York which has a cost of living index of 100.
Most expensive cities in the Middle East (Global rank in brackets)
1. Qatar, Doha (69)
2. United Arab Emirates, Abu Dhabi (73)
3. Israel, Jerusalem (76)
4. Bahrain, Manama (81)
5. Saudi Arabia, Riyadh (123)
6. United Arab Emirates, Dubai (131)
7. Lebanon, Beirut (138)
8. Kuwait, Kuwait City (171)
9. Iran, Tehran (172)
10. Syria, Damascus (186)