Thursday, February 4, 2016

Riyadh and Jeddah among the Top 10 Cheapest Cities – Economic Intelligence Unit

The Kingdom of Saudi Arabia is one of the richest and most economical countries to live in. The capital of KSA, Riyadh and Jeddah are ranked as the top 10 cheapest cities to live in in the world according to Economist Intelligence Unit. With the growing economy, the prices of commodities are increasing every day. Each year these reports help people rethink their immigration decisions. When prices of commodities rise, the cost of living reduces as now people need more money to maintain the same lifestyle as they were previously. No one would have imagined that a city in Saudi Arabia would be ranked as one of the cheapest cities in the world where one could live.

The government control over the price of commodities ensure the market price of commodities are not exploiting the buyers, the constant stability in prices was noted in the Worldwide Cost of Living 2014 report. The editor of the report, Jon Copestake who is also a consumer goods analyst and chief retail stated that the country which is producing oil by volumes promotes energy goods to be cheaper and more affordable if compared to other goods, the cheap rents are a result of low population density which further reduce the prices of stores.

He further stated that pork and alcohol, which is Haram, is being imported into the country at a premium in the growing markets and is not part of the calculation for the cost of living. Emphasis was placed on the domestic goods instead of the energy goods. The report had ranked Jeddah and Riyadh 122 and 123 out of the 131 terms of living costs. Many cities were more expensive to live in like Abu Dhabi at 82, Dubai at 94, Al-Khobar at 111, Bahrain at 108, Muscat at 120, Doha at 115 and Kuwait City at 115. The prices in neighboring countries were cheaper due to the fewer price controls and less resources as compared to the Kingdom of Saudi Arabia.

Being the largest oil producers in the world, they had an advantage over their neighboring countries, having the ability to control and monitor the strict exchange rate policies and their efforts as a country to control the inflation in this growing economy which affected the cost of living to improve and be affordable. The Middle Eastern countries along with Saudi Arabia all have a similar spending behavior and cost of living thus evaluating are easier.

On the other hand, countries like Singapore were ranked as the most expensive city to live in along with Caracas, Melbourne, Paris, Zurich, Copenhagen Oslo and Tokyo. A study which was conducted on 400 individual prices of 160 products and services which included transport, home rents, house supplies, drink, food, private schools and recreational costs and many more. It ranged from various stores and supermarkets which had mid-priced and high-priced goods. The result shows prices of around 160 items of each city and the market price of the commodities which the buyers are ready to pay.

Source: Al Arabiya

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