Have increasing rentals, cost of education and food bills eaten into your savings potential over the years? But hasn’t your salary too grown over these years, giving you a better cushion against the rising cost of living?

Do you sometimes feel you had more money to spare when you earned much less, thanks to rising cost of everything?

Well, courtesy the Statistics Centre – Abu Dhabi (SCAD), you now have the means to find out if your wages have kept pace with the increasing cost of living in the UAE.

SCAD yesterday launched three new initiatives, which includes a ‘Purchasing Power Calculator’ that links the purchasing power of the UAE dirham with average inflation levels based on the official Consumer Price Index (CPI).

This digital application is capable of calculating the purchasing power of the dirham during any year from 1980 onwards.

This means that if you input your salary in a base year (say, 2005) and calculate that year’s salary for its purchasing power in 2013, you’d get a figure that should, ideally, be less than your current salary. If it is more than your current pay, it would suggest that your wages haven’t kept up with the UAE’s inflation rate, and your financials are worse off than the base year.

If, on the other hand, the figure is less than your current pay, then it should offer you some comfort in the fact that you have managed to grow your income at a higher clip than inflation – i.e., your financials are better off today than they were in the base year. How much better they are will depend on the difference between calculated figure and your current salary.

“Purchasing Power Calculator compares the relative value of a past amount of dirhams to a present amount,” reads the SCAD description for the tool.

“To determine the value of an amount of money in a particular (‘original’) year compared to another (‘desired’) year, enter the values in the appropriate places. For example, you may want to know: How much money would you need in the year 2012, to have the same ‘purchasing power’ of AED 100 in year 2002. If you entered these values in the correct places, you will find that the answer is AED 168.61.”

Try it out for yourself right here: Purchasing Power Calculator.

In order to know the purchasing power of the dirham during a particular year, the user simply needs to enter the amount, based on which the application will provide details of products that could have been bought with the same amount in that specific year.

A SCAD statement said that this application will be beneficial to government and private entities as well as decision-makers in the financial sector, entities working on retirement plans, researchers and academics, investors and businessmen, traders in Abu Dhabi stock market, importers and distributors, insurance companies, banks and even the average consumer who might be looking to sell an asset.

The other strategic initiatives launched by SCAD include the ‘Personal Inflation Calculator’ and ‘Abu Dhabi Population Clock’. According to a SCAD statement, these initiatives are the first of their kind in the Middle East and are being offered online to provide maximum benefit to users.

The Personal Inflation Calculator initiative allows users to calculate their personal inflation levels, both in terms of individual expenditures and family expenditures. SCAD maintains that what sets this initiative apart from other inflation calculation tools is that it will allow each family to gauge its personal inflation in comparison to the overall inflation levels. “SCAD has utilised technologically advanced methodologies in the system to help families and individuals determine their inflation levels,” it says.

The system gathers results based on real data of the family expenditure in key segments and in comparison to the consumer basket. Users can benefit from this service by entering the real value of their monthly or annual expenditure. The system distributes this figure across 12 key segments, which are benchmarked on International Monetary Fund (IMF) standards, to calculate the users’ personal inflation levels.

According to SCAD, the method used by the new initiative to calculate family or personal expenditure is more accurate than other techniques which depend on consumer price index (CPI) to calculate the average change in standard products basket, and as a result measures only average inflation levels.

Try it out here: Personal Inflation Calculator. 

The third tool, the Abu Dhabi Population Clock, is based on an online programme that estimates changes in population levels by the second as per the personal computer’s clock. The change in population numbers is calculated by adding the number of new entries at immigration centres with the new births in the country and deducting the number of deaths reported.

While it is very difficult to develop an accurate formula to measure these changes in a place like Abu Dhabi, the Abu Dhabi Population Clock was programmed after putting it through a number of tests during different periods of time to create a highly accurate system with a margin of error not exceeding 0.0003. This is below the average error reported in traditional calculations of populations currently being used in statistical centres around the world.

Butti Ahmed Mohamed bin Butti Al Qubaisi, Director-General of SCAD, said, “We are very excited to launch these initiatives which are a demonstration of our ongoing commitment to provide fresh and accurate data to support the overall development we are witnessing in Abu Dhabi in line with Vision 2030. These initiatives are based on real data and will provide us with the ability to gauge the level of development.”

Al Qubaisi said SCAD is the only entity that is mandated to provide such data which considerably increases its level of responsibility. However, SCAD is happy to take this responsibility which will help strengthen its commitment to provide realistic solutions and creative ideas, based on useful data, to support the local community and decision makers in future.

 

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