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Djibouti, Arab World’s Most Expensive City

Hiiraan Online
Monday, July 25, 2011
By Abdullahi Jamaa

Djibouti is ranked the most expensive city in the Muslim and Arab world as the cost of living in most of cities around the globe hits record high in recent years.

According to an economic survey by Mercer, a global leader in human resource consulting, outsourcing and investment services, Djibouti and Khartoum are ranked among the top 50 most expensive cities in the world.

 “Two main factors determine a city’s ranking in Mercer’s Cost of Living survey: 1. the relative strength or weakness of the relevant currency against the US dollar over the prior 12 months; and  2. price movements over the prior 12 months compared to those in New York City as the base” indicated the survey that was done in March 2011.

Djibouti’s ranking in cost of living is attributed to its skyrocketing rise   in accommodation and housing expenses, raising the general cost of living for expatriates.

According to Mercer, Tunis remains the least costly in the Arab region as the rankings of four Arab cities increased in 2011, while those of the remaining 16 cities dropped this year.

The survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

“It is the world’s most comprehensive cost of living survey and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees” Mercer survey

Top 10 ranked cities are dominated by Africa, Europe and Asia as Luanda in Angola remained the world’s most expensive city, and Karachi in Pakistan maintained its status as the least costly city globally.

Nathalie Constantin-Métral, Senior Researcher at Mercer responsible for compiling the ranking each year, commented: ““During the period of data collection for this year’s survey the world witnessed an incredible number of natural disasters and political upheavals that have all affected the lives of expatriate employees to some extent. Currency fluctuations and the impact of inflation on goods and services – petrol in particular -have led to some reorganisation of the ranking,”

 “Overall, the cost of living in cities across Europe has remained relatively stable, while in Africa the picture is patchy with the limited availability of accommodation leading to increased living costs in some key cities". Said Ms Constantin-Métral.