2026 Middle East Cost of Living

Xpatulator’s 2026 cost of living index for Middle East cities benchmarks spending patterns typical of international professionals and managers, with New York City set to 100 for reference. Within this regional list, Jerusalem ranks highest at 98.4, placing it close to New York City in relative terms, while most Gulf cities cluster in the mid to high seventies. Lower scores for several capitals in the Levant and further east do not necessarily indicate an easy assignment, because security, housing quality, and import dependence can still push an expatriate household’s actual outgoings above what local price levels suggest.

Jerusalem’s position tends to reflect tight housing supply, high demand for centrally located neighbourhoods, and a cost structure influenced by imported consumer goods and higher service wages. The economic backdrop also matters. Israel has faced elevated defence spending pressures linked to the Gaza conflict and a fragile ceasefire environment, which can feed through into insurance, security, logistics, and public finance choices over time. Currency movements can amplify these effects for expatriates paid in United States dollars. The Bank of Israel has recently reported a stronger shekel versus the United States dollar, which mechanically raises United States dollar priced living costs when local expenses are paid in shekels.

Abu Dhabi and Dubai sit just below eighty, with pricing shaped by a concentrated premium housing market, schooling choices that often default to fee paying international curricula, and a service economy priced for globally mobile demand. In these markets, the headline cost can hinge on rent cycles, school admissions timing, and whether an employer covers transport and healthcare. Their currency peg to the United States dollar tends to reduce year on year currency noise in United States dollar comparisons, so ranking changes are more likely to reflect local inflation and housing dynamics than exchange rate swings.

Kuwait City, Doha, Manama, Riyadh, and Muscat share several structural cost drivers: a high reliance on imports for many food categories and consumer goods, a relatively small pool of premium expatriate suitable housing, and pricing for discretionary items that can be shaped by regulation and taxation. Exchange rate policy matters here too. Qatar’s peg to the United States dollar and Bahrain’s peg at 0.376 dinars to the United States dollar typically stabilise the currency effect in United States dollar comparisons, while Kuwait’s basket based regime can allow more movement against the United States dollar than its neighbours. Saudi Arabia’s currency peg similarly dampens exchange rate driven shifts, meaning the more material variables for expatriates are usually rents, transport, schooling, and food prices.

Inflation has been uneven across the region, and that feeds directly into salary purchasing power. Saudi Arabia’s official statistics put annual inflation at 2.1 in December 2025, with housing related components often a key contributor. Qatar reported year on year consumer price growth of just under 2 in December 2025, pointing to modest but persistent price pressure for household baskets. For the United Arab Emirates, the central bank’s recent reporting shows inflation dynamics vary materially by category, with housing costs often doing more work than headline averages suggest. Xpatulator’s international inflation rates page is updated frequently and is designed to help users link these inflation patterns back to cost of living outcomes across countries.

Several cities lower down the index illustrate why expatriates should not treat a lower score as a simple green light. Beirut’s score sits in the low sixties, but the country’s prolonged financial and currency dislocation has created complexity in pricing, payment channels, and availability of imported goods. Tehran’s score is much lower, yet recent reporting highlights severe inflation and sharp currency depreciation, which can change real purchasing power quickly and increase volatility in everyday pricing. Baghdad and Damascus score lower still, where conflict legacies, sanctions exposure, and shifting control over economic assets can translate into supply constraints and higher risk premiums for secure housing and services. Yemen’s capital, Sanaa, also illustrates that security conditions and institutional fragmentation can dominate the lived experience of cost, even when local price levels are comparatively low.

For any expatriate assessing a move, the practical lesson is to compare like with like before accepting a package. A salary that looks higher in nominal terms can buy less once rent, schooling, healthcare, commuting, and imported grocery baskets are priced in. A structured comparison helps employers and assignees separate negotiable items, such as housing allowances, school fees, and transport support, from non negotiable market realities. Failing to model the cost difference can reduce salary purchasing power, increase the likelihood of early repatriation, and create avoidable employee relations issues once costs become visible after arrival. Tools such as Xpatulator’s Salary Purchasing Power Parity Calculator help quantify how much salary and allowance is typically required to maintain a comparable standard of living across locations.

Use Xpatulator’s Cost of Living Calculators and Tools for informed decision making about the cost of living and the salary, allowance, or assignment package required to maintain the current standard of living.