Salaries in Dubai rising faster than inflation: DCCI

Salaries in Dubai will increase more than inflation which will continue to drive consumer spending this year, says a senior government official.

“Inflation was between one and two per cent for the last few years and it is little higher now. But we have to keep in mind that salaries are, in fact, increasing higher than the inflation,” Hamad Buamim, President and CEO, Dubai Chamber, said when asked by Emirates 24/7 on the likelihood of residents reducing spending due to rising inflation.

“So will there be less spending? No… I think there will be more spending. I expect salaries to be up higher than inflation. As long as it [inflation] stays within a reasonable number its ok.

“But the expectations that we have been living in 2014 so far is that income is higher which will lead to more spending,” he asserted.

Buamim was talking post the release of CBRE’s 2014 report on “How global is the business of retail”, on Wednesday at the Dubai Chamber office. The report revealed the UAE had retained its position of being the second most favoured global market by international retailers, with Dubai holding on to its second position among the most preferred cities by retailers in 2014.

(Read: UAE beats China and US in terms of global retailer presence)

Emirates NBD, a top Dubai bank, has said that cost of living in the UAE is expected to continue rising in the second half of the year and may even reach over 4 per cent year-on-year by the end of 2014, primarily driven by economic growth and inflow of expatriates pushing up rents and property prices higher.

Headline inflation in the UAE remained relatively low at 1.9 per cent in March, up from 1.5 per cent in December 2013.

Earlier this year, Towers Watson, a professional services firm, said employees in the UAE can expect an average salary hike of 5 per cent in 2014, stating inflation will average 2.5 per cent, which will result in an increase in disposable income to the extent of 2.5 per cent. Robert Half Middle East, a recruitment firm, too predicted salaries in the UAE and the Middle East are expected to go up by an average of 3.8 per cent in 2014.

UAE expects to top the list

Buamim is optimistic that the UAE and Dubai will beat London to top the chart of the most favoured global markets by international retailers in coming years.

“We are a young city compared to London or Paris. It’s a big achievement for us to maintain the second top position for the past three years. We are looking to take the first position in coming years and sustain it for long,” he added.

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