Middle East Expat Cost of Living Comparison Rankings January 2015

Jerusalem in Israel is the most expensive city for expats in the Middle East at the start of 2015, followed by Abu Dhabi, Doha and Dubai in second, third and fourth respectively.

Despite ranking first in the Middle East, Jerusalem ranks only 136th worldwide out of 780 global locations. But why has Jerusalem become the most expensive location in the Middle East? The Bank of Israel has noted that inflation is well below its 1 to 3 percent target and the Israeli economy has been slowing across the board. GDP has slowed to growth of 1.2 percent in the second quarter of 2014 compared with the year before. These downward economic trends may have been worsened by the recent hostilities in Gaza, however Israel’s economic growth has been slowly decelerating since 2011.

Exports account for approximately 40 percent of Israel’s GDP, which means that the economy is negatively affected by a strong shekel. The currency has strengthened by 15 percent since 2012, as measured by the Bank of Israel’s trade-weighted index, and 23 percent against the U.S. dollar since the financial crisis. The 400 percent increase in the Israeli Consumer Price Index between June 2007 and June 2011 led to massive street protests in 2011 and 2012 that drew hundreds of thousands of participants. The inflation protests were primarily about the high cost of food, energy, and housing.

Haifa, Gush Dan, and Tel Aviv have seen extremely large housing price increases between 12 and 25 percent in the past year. Since 2008, the average rent in Israel has risen by 49 percent with larger increases of 60 and 50 percent in Tel Aviv and Sharon repectively.

For expat's the strong shekel has made imports more expensive, and the relatively high cost of housing has further contributed to Israel becoming the most expensive country, and Jerusalem the most expensive city in the Middle East. In comparison to Jerusalem's rank of 136th worldwide, Abu Dhabi ranks 159th, Doha 167th, Dubai 173rd, and Beirut 219th, far lower than Western Europe and much of Asia-Pacific.

Xpatulator.com has been created to assist subscribers calculate expatriate pay using the online calculators and extensive database of cost of living and hardship indexes, for 780 international locations. The cost of living ranking information is updated quarterly using data collected by Xpatulator.com over the past 12 months.

For more, read a free cost of living review for the following Middle East locations:

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