The Manchester City manager believes Sunday's opponents are capable of producing a serious challenge for the Premier League title this season
The Gunners’ last Premier League outing saw them maintain their unbeaten start to the season with a convincing 6-1 win over newly promoted Southampton.
Mancini's men meet Arsene Wenger's side on Sunday and the Italian thinks it will be one of the toughest games of the champions' season.
"They are one of the best teams in the world,” he told reporters. “They played very well at Liverpool away recently and that showed this will be a difficult game for us. They are very strong, especially with counter-attacking.
"They have lost Van Persie and Song but I think they have less pressure and can fight for the title because they have good players.
"I like Podolski, I like Cazorla, I like Giroud. I think they had a good market in the transfer window. Arsenal are a fantastic club for me.
"Van Persie for me is a top player - he scores one or two goals almost every game and if you have Van Persie in your team you have more chance to win. But this year they have brought in three or four players in good positions and maybe they can improve on last season."
Mancini also repeated his belief that City will have to spend money in the January transfer window in order to retain their Premier League title.
"If we want to stay on top with all the other teams that spend a lot of money in the last 10 years we need to improve and buy top players.” he continued. "It is usually more difficult to stay on top.
“It can happen that you can win the title because you play well or because you are lucky. We deserved to win last year but the second year is always more difficult.
"There were a lot of teams in the past spending money for big players, including Arsenal. This is normal.
"For us it was difficult. We needed to buy good players if we wanted to improve. We had the chance to take good players and we did this.
"All the managers talk about the money we have all the time but on the pitch we have 11 players like all the others."