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Tourists at the Emirates Palace Hotel, Abu Dhabi. Hotels in the capital have decided to ‘lower the room rate’ in order to stimulate the market and attract more visitors. Image Credit: Abdul Rahman/Gulf News archive

Dubai: Abu Dhabi is the second most expensive city in the Middle East for expatriates, according to a new report from the global consultancy firm Mercer. 

The UAE capital, which ranked 67th overall in Mercer's 2011 Cost of Living survey, has dropped 17 places from last year's report with Dubai also falling to 81st, down 26 places, in the latest standings. 

"Dubai in particular has witnessed a reduction in accommodation costs since 2009 as the strong supply of property coming on to the rental market has reduced the shortage that existed in the several years prior to 2008," said Callum Burns-Green, head of Mercer's Dubai office. 

"The Government has also announced plans to control inflation in other key areas such as the cost of food," he added.