Friday, April 25, 2014

Riyadh, Jeddah among world’s cheapest cities

The Saudi capital and the Bride of the Red Sea are among the top 10 cheapest cities in the world to live in, according to a study.
Price controls on staples in the Kingdom of Saudi Arabia are continuing to guarantee low prices for many goods, said the Worldwide Cost of Living 2014 report issued by the Economist Intelligence Unit.
The report’s editor Jon Copestake, also chief retail and consumer goods analyst at the unit, told Saudi Gazette: “As an oil producing country, energy related products are often cheaper as is fuel and other goods. Given the low population density, rents are also relatively cheap in Saudi, which drive down store prices as a factor.”
He pointed out that alcohol and pork, which may be imported at a premium in many emerging markets, were absent from the unit’s calculation for Saudi cities.
This pushes the emphasis in the cost of living back onto other domestic goods or those with price controls, he said.
The report ranked Jeddah and Riyadh 122 and 123 respectively out of 131 in terms of living costs.
They were far cheaper to live in than the UAE cities of Abu Dhabi (82), Dubai (94), but only marginally more so than others in the Gulf Cooperation Council such as Bahrain (108), Doha (115=), Kuwait City (115=) and Muscat (120).
Al-Khobar (111) was also assessed as part of the report. Copstake said: “Prices in other locations may be higher because of fewer price controls or less resource wealth than Saudi.
“Although, it is worth noting that many Middle Eastern peers to Saudi seem to have similar levels of cost of living.
“Price controls by the government as well as strict exchange rate controls pegging to the US dollar and efforts to curtail inflation have all influenced the lower cost of living in Saudi.”
On the other side of the spectrum, the report named Singapore the most expensive city to live in, followed by Paris, Oslo, Zurich, Sydney, Caracas, Geneva, Melbourne, Tokyo and Copenhagen.
The study compared more than 400 individual prices across 160 products and services, including food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs.
The study surveyed a range of stores, consisting of supermarkets, mid-priced stores and higher-priced specialty outlets.
Prices reflect costs for more than 160 items in each city and are what the paying customer is charged, not recommended retail prices or manufacturers’ costs.