Despite the crises… Why is Beirut considered one of the most expensive Arab cities?

July 16, 2024

The Lebanese capital Beirut has been ranked the sixth most expensive city in the Arab world, after Dubai, Abu Dhabi, Doha, Riyadh and Jeddah, according to the latest report from Numbeo’s annual Cost of Living Index.

Globally, Beirut ranks 113th out of 178 most expensive cities with a cost of living index of 45.2 points. For comparison, Geneva tops the index with a score of 101.7 points.

Despite the high cost of living, the quality of life in Beirut is declining sharply. In the Numbeo Quality of Life Index, the city ranks 171 out of 178 cities worldwide.

Even with the economic crisis that has greatly reduced the financial capacity of the population, the cost of living in the Lebanese capital remains high.

A recent World Bank report revealed that poverty in Lebanon has more than tripled over the past decade, affecting 44 percent of the population. The report also highlighted that poverty is unevenly distributed across the country.

With the rapid expansion of the dollar-based, cash-based economy, Lebanese households who earn in dollars have been able to maintain their purchasing power to some extent. In contrast, those who do not have access to foreign currency are more vulnerable to rising inflation.

Patrick Mardini, an economist and CEO of the Lebanese Institute for Market Studies, attributes the high cost of living in Lebanon to the monopoly of public utilities and the impact of tourism.

“Electricity, telephone and internet services are expensive in Lebanon because of monopolies. For example, the monopoly of electricity production leads to poor service with frequent outages,” he said.

“Another factor contributing to the rise in prices is tourism. Restaurants, for example, are relatively expensive due to strong demand from tourists and expatriates during the summer and holidays. This sector mainly caters to people living abroad who can afford the higher prices,” he added.

“The Lebanese people have been hit by three financial blows: loss of savings, reduced income, and erosion of purchasing power, especially for those who earn in Lebanese pounds,” Mardini said. “Today, per capita income in Lebanon is 60 percent below pre-crisis levels, underscoring the persistence of financial pressures.” (Alarabyia English)

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